ECON 101 ALL FINAL EXAMS UPDATED QUESTIONS
AND ANSWERS SURE A+
✔✔The overall performance of the economic system as a whole is the focus of
a. international finance
b. labor economics
c. microeconomics
d. macroeconomics
e. public economics - ✔✔d. macroeconomics
✔✔Microeconomics analyzes individual parts of the economy rather than broad
economic aggregates.
a. True
b. False - ✔✔a. True
✔✔Suppose that the Council of Economic Advisers tells the President that "the
unemployment rate is 4 percent." The President responds, "That rate is still too high."
The President's statement is
a. a normative statement
b. a positive statement
c. empirically verifiable by checking economic data
d. an indisputable statistical fact
e. an incorrect positive statement - ✔✔a. a normative statement
,✔✔Individuals face opportunity costs because
a. the minimum wage is too low
b. technology is improving too quickly
c. time and funds are scarce
d. government cutbacks are widespread, except possibly among society's most affluent
households
e. welfare gives individuals an incentive to stay at home - ✔✔c. time and funds are
scarce
✔✔When households and businesses interact in resource markets money
a. is not exchanged
b. is flowing toward businesses
c. is flowing toward households
d. is not used at all
e. is flowing to both businesses and households - ✔✔c. is flowing toward households
✔✔When demand increases,
a. consumers are willing and able to purchase more of the good at every price
b. is flowing toward businesses
c. is flowing toward households
d. is not used at all
e. is flowing to both businesses and households - ✔✔a. consumers are willing and able
to purchase more of the good at every price
✔✔Supply curves are usually assumed to slope upward because
a. profits fall as prices rise
b. a higher price leads to increases in demand
c. a higher price leads to decreases in demand
d. a higher price attracts resources from other less valued uses
e. firms drop out of the market as prices rise - ✔✔d. a higher price attracts resources
from other less valued uses
✔✔Which of the following would not lead to a change in the supply of chocolate ice
cream?
a. a change in productive capacity
b. a change in the price of strawberry ice cream
c. a change in the price of milk
d. a change in the price of chocolate ice cream
e. a change in the expected future price of chocolate ice cream - ✔✔d. a change in the
price of chocolate ice cream
✔✔Which of the following would cause a leftward shift of the supply curve for
computers?
a. an increase in the price of printed circuit boards used to build computers
b. a decrease in the price of electricity
, c. an increase in incomes of consumers
d. a decrease in the price of computers
e. a decrease in the size of the population - ✔✔a. an increase in the price of printed
circuit boards used to build computers
✔✔If both the demand and supply curves for computers shift to the right, the price of
computers may rise, fall, or remain unchanged.
a. True
b. False - ✔✔a. True
✔✔If the market for a good is initially in equilibrium and there is a rightward shift of the
demand curve, then
a. the equilibrium price will fall
b. there will be a rightward movement along the supply curve
c. the supply curve will also shift to the right
d. the supply curve will shift to the left
e. the demand curve will shift back as consumers react to the higher equilibrium price -
✔✔b. there will be a rightward movement along the supply curve
✔✔Production is productively efficient when
a. the maximum possible output is being produced from a given collection of inputs
b. people are working their hardest
c. no more capital can be substituted for labor
d. technological innovation is no longer desirable
e. workers perform their duties at the expected level, even if they are physically capable
of
doing more - ✔✔a. the maximum possible output is being produced from a given
collection of inputs
✔✔The principle of specialization and exchange implies that
a. total production is highest when individuals specialize according to their absolute
advantages
b. productive inefficiency increases as producers in society specialize
c. exchange can only occur when there is specialization in the economy
d. gains from specialization will only occur when society is operating at a point along its
production possibilities frontier
e. total production is highest when individuals specialize according to their comparative
advantages - ✔✔e. total production is highest when individuals specialize according to
their comparative
advantages
✔✔Maximizing output by following the principle of comparative advantage requires
a. specialization only
b. exchange only
c. both specialization and exchange
AND ANSWERS SURE A+
✔✔The overall performance of the economic system as a whole is the focus of
a. international finance
b. labor economics
c. microeconomics
d. macroeconomics
e. public economics - ✔✔d. macroeconomics
✔✔Microeconomics analyzes individual parts of the economy rather than broad
economic aggregates.
a. True
b. False - ✔✔a. True
✔✔Suppose that the Council of Economic Advisers tells the President that "the
unemployment rate is 4 percent." The President responds, "That rate is still too high."
The President's statement is
a. a normative statement
b. a positive statement
c. empirically verifiable by checking economic data
d. an indisputable statistical fact
e. an incorrect positive statement - ✔✔a. a normative statement
,✔✔Individuals face opportunity costs because
a. the minimum wage is too low
b. technology is improving too quickly
c. time and funds are scarce
d. government cutbacks are widespread, except possibly among society's most affluent
households
e. welfare gives individuals an incentive to stay at home - ✔✔c. time and funds are
scarce
✔✔When households and businesses interact in resource markets money
a. is not exchanged
b. is flowing toward businesses
c. is flowing toward households
d. is not used at all
e. is flowing to both businesses and households - ✔✔c. is flowing toward households
✔✔When demand increases,
a. consumers are willing and able to purchase more of the good at every price
b. is flowing toward businesses
c. is flowing toward households
d. is not used at all
e. is flowing to both businesses and households - ✔✔a. consumers are willing and able
to purchase more of the good at every price
✔✔Supply curves are usually assumed to slope upward because
a. profits fall as prices rise
b. a higher price leads to increases in demand
c. a higher price leads to decreases in demand
d. a higher price attracts resources from other less valued uses
e. firms drop out of the market as prices rise - ✔✔d. a higher price attracts resources
from other less valued uses
✔✔Which of the following would not lead to a change in the supply of chocolate ice
cream?
a. a change in productive capacity
b. a change in the price of strawberry ice cream
c. a change in the price of milk
d. a change in the price of chocolate ice cream
e. a change in the expected future price of chocolate ice cream - ✔✔d. a change in the
price of chocolate ice cream
✔✔Which of the following would cause a leftward shift of the supply curve for
computers?
a. an increase in the price of printed circuit boards used to build computers
b. a decrease in the price of electricity
, c. an increase in incomes of consumers
d. a decrease in the price of computers
e. a decrease in the size of the population - ✔✔a. an increase in the price of printed
circuit boards used to build computers
✔✔If both the demand and supply curves for computers shift to the right, the price of
computers may rise, fall, or remain unchanged.
a. True
b. False - ✔✔a. True
✔✔If the market for a good is initially in equilibrium and there is a rightward shift of the
demand curve, then
a. the equilibrium price will fall
b. there will be a rightward movement along the supply curve
c. the supply curve will also shift to the right
d. the supply curve will shift to the left
e. the demand curve will shift back as consumers react to the higher equilibrium price -
✔✔b. there will be a rightward movement along the supply curve
✔✔Production is productively efficient when
a. the maximum possible output is being produced from a given collection of inputs
b. people are working their hardest
c. no more capital can be substituted for labor
d. technological innovation is no longer desirable
e. workers perform their duties at the expected level, even if they are physically capable
of
doing more - ✔✔a. the maximum possible output is being produced from a given
collection of inputs
✔✔The principle of specialization and exchange implies that
a. total production is highest when individuals specialize according to their absolute
advantages
b. productive inefficiency increases as producers in society specialize
c. exchange can only occur when there is specialization in the economy
d. gains from specialization will only occur when society is operating at a point along its
production possibilities frontier
e. total production is highest when individuals specialize according to their comparative
advantages - ✔✔e. total production is highest when individuals specialize according to
their comparative
advantages
✔✔Maximizing output by following the principle of comparative advantage requires
a. specialization only
b. exchange only
c. both specialization and exchange
