ECN 211 CORE EXAM 2026 TEST QUESTIONS AND
SOLUTIONS GRADED A+
✔✔Substitute - ✔✔McDonald's for In'N'Out
✔✔Supply - ✔✔Behaviors of sellers in a market
✔✔Law of Supply - ✔✔P↑ Q↑
✔✔Input Prices
Technology
Expectations
Number of Sellers - ✔✔Shifts in Supply
✔✔Individual Supply - ✔✔supply of one individual or firm
✔✔Market Supply - ✔✔supply of all firms in market
✔✔Determinants of Supply (changes in supply) - ✔✔Input Prices
Technology
Expectations
Number of Sellers
✔✔Market Equilibrium - ✔✔Price at which quantity supplied = quantity demanded
✔✔Equilibrium Price - ✔✔market price where the quantity of goods supplied is equal to
the quantity of goods demanded.
✔✔Surplus - ✔✔A surplus is used to describe many excess assets including income,
profits, capital and goods.
✔✔Shortage - ✔✔or excess demand is a situation in which the demand for a product or
service exceeds its supply in a market.
✔✔Price Ceilings - ✔✔a legal maximum on the price
of a good or service Example: rent control
✔✔Price Floors - ✔✔a legal minimum on the price of
a good or service Example: minimum wage
✔✔Taxes - ✔✔The govt can make buyers or sellers pay a specific amount on each unit.
✔✔Graphical illustration of a tax - ✔✔Graphical illustration of a tax
, ✔✔Equilibrium after tax Pb, Ps, Q - ✔✔Equilibrium after tax Pb, Ps, Q
✔✔Incidence of tax - ✔✔how the burden of a tax is shared among
market participants
✔✔Consumer Surplus - ✔✔Difference between what a consumer is willing to pay for a
good and what the consumer actually pays
✔✔Producer Surplus - ✔✔Difference between the actual price a producer receives and
the minimum price they would accept
✔✔Total Surplus - ✔✔CS+TS
✔✔Deadweight Loss - ✔✔The tax reduces total surplus
✔✔Look at Tax Graphs! - ✔✔Look at Tax Graphs!
✔✔ Utility - ✔✔Pleasure or satisfaction obtained from consuming a good or service
✔✔Economizing Problem - ✔✔Wants exceed means
✔✔Economizing Problem - ✔✔Limited resources vs. unlimited wants
✔✔Individuals Economizing Problem - ✔✔Budget Line
✔✔Society's Economizing Problem - ✔✔Production Possibilities Frontier (PPF):
✔✔Factors of production - ✔✔the resources the economy uses to produce goods &
services, including labor, land, capital
✔✔Inverse Relationship (negative) - ✔✔Variables move in opposite directions
(negative)
✔✔Direct Relationship (positive) - ✔✔Both variables move in the same direction
(positive)
✔✔Equation of a Line - ✔✔y = a + bx
✔✔y - ✔✔Equation of a Line:
the variable on the vertical axis
✔✔a - ✔✔Equation of a Line:
the vertical intercept
SOLUTIONS GRADED A+
✔✔Substitute - ✔✔McDonald's for In'N'Out
✔✔Supply - ✔✔Behaviors of sellers in a market
✔✔Law of Supply - ✔✔P↑ Q↑
✔✔Input Prices
Technology
Expectations
Number of Sellers - ✔✔Shifts in Supply
✔✔Individual Supply - ✔✔supply of one individual or firm
✔✔Market Supply - ✔✔supply of all firms in market
✔✔Determinants of Supply (changes in supply) - ✔✔Input Prices
Technology
Expectations
Number of Sellers
✔✔Market Equilibrium - ✔✔Price at which quantity supplied = quantity demanded
✔✔Equilibrium Price - ✔✔market price where the quantity of goods supplied is equal to
the quantity of goods demanded.
✔✔Surplus - ✔✔A surplus is used to describe many excess assets including income,
profits, capital and goods.
✔✔Shortage - ✔✔or excess demand is a situation in which the demand for a product or
service exceeds its supply in a market.
✔✔Price Ceilings - ✔✔a legal maximum on the price
of a good or service Example: rent control
✔✔Price Floors - ✔✔a legal minimum on the price of
a good or service Example: minimum wage
✔✔Taxes - ✔✔The govt can make buyers or sellers pay a specific amount on each unit.
✔✔Graphical illustration of a tax - ✔✔Graphical illustration of a tax
, ✔✔Equilibrium after tax Pb, Ps, Q - ✔✔Equilibrium after tax Pb, Ps, Q
✔✔Incidence of tax - ✔✔how the burden of a tax is shared among
market participants
✔✔Consumer Surplus - ✔✔Difference between what a consumer is willing to pay for a
good and what the consumer actually pays
✔✔Producer Surplus - ✔✔Difference between the actual price a producer receives and
the minimum price they would accept
✔✔Total Surplus - ✔✔CS+TS
✔✔Deadweight Loss - ✔✔The tax reduces total surplus
✔✔Look at Tax Graphs! - ✔✔Look at Tax Graphs!
✔✔ Utility - ✔✔Pleasure or satisfaction obtained from consuming a good or service
✔✔Economizing Problem - ✔✔Wants exceed means
✔✔Economizing Problem - ✔✔Limited resources vs. unlimited wants
✔✔Individuals Economizing Problem - ✔✔Budget Line
✔✔Society's Economizing Problem - ✔✔Production Possibilities Frontier (PPF):
✔✔Factors of production - ✔✔the resources the economy uses to produce goods &
services, including labor, land, capital
✔✔Inverse Relationship (negative) - ✔✔Variables move in opposite directions
(negative)
✔✔Direct Relationship (positive) - ✔✔Both variables move in the same direction
(positive)
✔✔Equation of a Line - ✔✔y = a + bx
✔✔y - ✔✔Equation of a Line:
the variable on the vertical axis
✔✔a - ✔✔Equation of a Line:
the vertical intercept
