ECON 101 LATEST EXAMS SCRIPT QUESTIONS AND
ANSWERS SURE A+
✔✔Suppose that the United States has an absolute advantage over Mexico in
producing both agricultural and manufactured goods. In the U. S., the opportunity cost
of 1 unit of agricultural output is 2 units of manufactured goods. In Mexico, the
opportunity cost of 1 unit of agricultural output is 1.5 units of manufactured goods. Total
production in the U. S. and Mexico will be maximized if
a. the U. S. specializes in both types of output
b. Mexico specializes in both types of output
c. the U. S. specializes in agricultural goods and Mexico specializes in manufactured
goods
d. the U. S. specializes in manufactured goods and Mexico specializes in agricultural
goods
e. each country achieves self-sufficiency - ✔✔d. the U. S. specializes in manufactured
goods and Mexico specializes in agricultural goods
✔✔Which of the following could cause the market demand curve for hot dogs to shift to
the left?
a. an increase in the price of hot dogs
b. a decrease in the price of hamburgers
c. an increase in the size of the population
d. an increase in the price of hot dog buns or rolls
e. an increase in the price of mustard - ✔✔b. a decrease in the price of hamburgers
, ✔✔The statement "The unemployment rate in the U.S. is 50 percent" is
a. a statement of opinion
b. a positive statement that can be falsified
c. lacking proper microeconomic foundations
d. a statistical anomaly
e. a philosophical difference of opinions regarding the nature and significance of
statistical
inference - ✔✔b. a positive statement that can be falsified
✔✔Which of the following could cause the market demand curve for burgers to shift to
the right?
a. an increase in the price of hot dogs
b. an increase in the minimum wage and burgers are inferior good
c. a decrease in the size of the population
d. an increase in the price of burger buns e. an increase in the price of beef - ✔✔a. an
increase in the price of hot dogs
✔✔1. Which of the following is an example of a non-rival good?
a. food
b. an car
c. a view of the sun rising
d. public housing
e. a private apartment - ✔✔c. a view of the sun rising
✔✔2. if a firm has an accounting profit of $2,350,000 and implicit costs totaling
$150,000, the its economic profit equals
a. $2,350,000
B. $2,500,000
c. $2,200,000
d. $150,000
e. $2,000,000 - ✔✔c. $2,200,000
✔✔4. a market failure in the form of an externality arises when
a. production costs are included in the price of a good
b. not all costs and benefits are included in the price of a good
c. the benefits of consuming a good exceed the costs
d. a market fails to achieve equilibrium
e. equilibrium price is unstable - ✔✔b. not all costs and benefits are included in the price
of a good
✔✔5. a market failure occurs when
a. a market equilibrium is economically inefficient
b. a market equilibrium is economically efficient
c. perfect competition maximizes the sum of consumer and producer surplus
ANSWERS SURE A+
✔✔Suppose that the United States has an absolute advantage over Mexico in
producing both agricultural and manufactured goods. In the U. S., the opportunity cost
of 1 unit of agricultural output is 2 units of manufactured goods. In Mexico, the
opportunity cost of 1 unit of agricultural output is 1.5 units of manufactured goods. Total
production in the U. S. and Mexico will be maximized if
a. the U. S. specializes in both types of output
b. Mexico specializes in both types of output
c. the U. S. specializes in agricultural goods and Mexico specializes in manufactured
goods
d. the U. S. specializes in manufactured goods and Mexico specializes in agricultural
goods
e. each country achieves self-sufficiency - ✔✔d. the U. S. specializes in manufactured
goods and Mexico specializes in agricultural goods
✔✔Which of the following could cause the market demand curve for hot dogs to shift to
the left?
a. an increase in the price of hot dogs
b. a decrease in the price of hamburgers
c. an increase in the size of the population
d. an increase in the price of hot dog buns or rolls
e. an increase in the price of mustard - ✔✔b. a decrease in the price of hamburgers
, ✔✔The statement "The unemployment rate in the U.S. is 50 percent" is
a. a statement of opinion
b. a positive statement that can be falsified
c. lacking proper microeconomic foundations
d. a statistical anomaly
e. a philosophical difference of opinions regarding the nature and significance of
statistical
inference - ✔✔b. a positive statement that can be falsified
✔✔Which of the following could cause the market demand curve for burgers to shift to
the right?
a. an increase in the price of hot dogs
b. an increase in the minimum wage and burgers are inferior good
c. a decrease in the size of the population
d. an increase in the price of burger buns e. an increase in the price of beef - ✔✔a. an
increase in the price of hot dogs
✔✔1. Which of the following is an example of a non-rival good?
a. food
b. an car
c. a view of the sun rising
d. public housing
e. a private apartment - ✔✔c. a view of the sun rising
✔✔2. if a firm has an accounting profit of $2,350,000 and implicit costs totaling
$150,000, the its economic profit equals
a. $2,350,000
B. $2,500,000
c. $2,200,000
d. $150,000
e. $2,000,000 - ✔✔c. $2,200,000
✔✔4. a market failure in the form of an externality arises when
a. production costs are included in the price of a good
b. not all costs and benefits are included in the price of a good
c. the benefits of consuming a good exceed the costs
d. a market fails to achieve equilibrium
e. equilibrium price is unstable - ✔✔b. not all costs and benefits are included in the price
of a good
✔✔5. a market failure occurs when
a. a market equilibrium is economically inefficient
b. a market equilibrium is economically efficient
c. perfect competition maximizes the sum of consumer and producer surplus
