ECON 111- TEST 1 REVIEW
(2025/2026) questions and answers
Sophia is planning her activities for a hot summer day. She would like to go to the local
swimming pool and see the latest blockbuster movie, but because she can only get tickets to
the movie for the same time that the pool is open she can only choose one activity. This
illustrates the basic principle that - correct answer ✔✔people face trade-offs
The average cost per seat on the 50-passenger Floating-On-Air Bus company's trip from Kansas
City to St. Louis, on which no refreshments are served, is $45. In advance of a particular trip,
three seats remain unsold. The bus company could increase its profit only if it - correct answer
✔✔charged any ticket price above $0 for the three remaining seats.
Senator Smart, who understands economic principles, is trying to convince workers in her
district that trade with other countries is beneficial. Senator Smart should argue that trade can
be beneficial - correct answer ✔✔because it allows specialization, which increases total output.
The adage, "There is no such thing as a free lunch," is used to illustrate the principle that -
correct answer ✔✔people face trade-offs
When the government implements programs such as progressive income tax rates, which of the
following is likely to occur? - correct answer ✔✔equality is increased and efficiency is
decreased.
Figure 2-9
Panel (a) Panel (b)
, Refer to Figure 2-9, Panel (a). Production is - correct answer ✔✔possible at points Q, R, S, and T,
but efficient only at points Q, S, and T.
The equilibrium of supply and demand in a market - correct answer ✔✔maximizes the total
benefits received by buyers and sellers.
Suppose a typical worker in France can produce 32 units of product in an eight-hour day, while a
typical worker in Germany can produce 30 units of product in a 10-hour day. We can conclude
that - correct answer ✔✔the standard of living will likely be higher in France than in Germany.
Efficiency is illustrated by - correct answer ✔✔the production possibilities frontier only.
Figure 2-9
Panel (a) Panel (b)
Refer to Figure 2-9, Panel (a). The movement from point S to point R could be caused by -
correct answer ✔✔unemployment
Figure 2-9
(2025/2026) questions and answers
Sophia is planning her activities for a hot summer day. She would like to go to the local
swimming pool and see the latest blockbuster movie, but because she can only get tickets to
the movie for the same time that the pool is open she can only choose one activity. This
illustrates the basic principle that - correct answer ✔✔people face trade-offs
The average cost per seat on the 50-passenger Floating-On-Air Bus company's trip from Kansas
City to St. Louis, on which no refreshments are served, is $45. In advance of a particular trip,
three seats remain unsold. The bus company could increase its profit only if it - correct answer
✔✔charged any ticket price above $0 for the three remaining seats.
Senator Smart, who understands economic principles, is trying to convince workers in her
district that trade with other countries is beneficial. Senator Smart should argue that trade can
be beneficial - correct answer ✔✔because it allows specialization, which increases total output.
The adage, "There is no such thing as a free lunch," is used to illustrate the principle that -
correct answer ✔✔people face trade-offs
When the government implements programs such as progressive income tax rates, which of the
following is likely to occur? - correct answer ✔✔equality is increased and efficiency is
decreased.
Figure 2-9
Panel (a) Panel (b)
, Refer to Figure 2-9, Panel (a). Production is - correct answer ✔✔possible at points Q, R, S, and T,
but efficient only at points Q, S, and T.
The equilibrium of supply and demand in a market - correct answer ✔✔maximizes the total
benefits received by buyers and sellers.
Suppose a typical worker in France can produce 32 units of product in an eight-hour day, while a
typical worker in Germany can produce 30 units of product in a 10-hour day. We can conclude
that - correct answer ✔✔the standard of living will likely be higher in France than in Germany.
Efficiency is illustrated by - correct answer ✔✔the production possibilities frontier only.
Figure 2-9
Panel (a) Panel (b)
Refer to Figure 2-9, Panel (a). The movement from point S to point R could be caused by -
correct answer ✔✔unemployment
Figure 2-9
