ECON 101 UPDATED EXAMS TEST PAPER QUESTIONS
AND ANSWERS SURE A+
✔✔In one day, Brandon can either plow 10 acres or plant 20 acres. In one day,
Christopher can either plow 14 acres or plant 14 acres. Brandon and Christopher can
-exchange, but only Brandon will gain from the exchange.
-gain from exchange if Brandon specializes in plowing and Christopher specializes in
planting.
-exchange, but only Christopher will gain from the exchange.
-gain from exchange if Brandon specializes in planting and Christopher specializes in
plowing. - ✔✔gain from exchange if Brandon specializes in planting and Christopher
specializes in plowing.
✔✔During the summer you have made the decision to attend summer school, which
prevents you from working at your usual summer job in which you normally earn $6,000
for the summer. Your tuition cost is $3,000 and books and supplies cost $1,300. In
terms of dollars, the opportunity cost of attending summer school is
$4,300.
$3,300.
$6,000.
$10,300. - ✔✔$10,300.
✔✔As we increase the production of computers, we find that we must give up larger
and larger amounts of DVD players per computer.
,-DVD players will be more highly regarded by consumers than computers.
-This situation illustrates increasing opportunity cost.
-As a result, we should specialize in the production of DVD players.
-The production possibilities frontier for computers and DVD players is a straight line. -
✔✔This situation illustrates increasing opportunity cost.
✔✔Suppose a scientific breakthrough made free solar power available in unlimited
quantities in the United States. The effect of this invention would be to move the
-U.S. production possibilities frontier outward.
-United States beyond its production possibilities frontier.
-U.S. production possibilities frontier inward.
-United States inside its production possibilities frontier. - ✔✔U.S. production
possibilities frontier outward.
✔✔When a firm decides to produce more electric cars and conventional gas powered
cars, it is most directly answering the ________ part of one of the two big economic
questions.
-"how"
-"scarcity"
-"for whom"
-"what" - ✔✔"what"
✔✔In the figure above, a point showing an inefficient production point is point
A.
B.
C.
D. - ✔✔D.
✔✔Human resources that perform the functions of organizing, managing, and
assembling the other resources are called
-venture capital.
-productive capital.
-entrepreneurship.
-physical capital. - ✔✔entrepreneurship.
✔✔In the above figure, if 4000 bicycles are produced per month,
-marginal benefit is greater than marginal cost.
-fewer bicycles should be produced to reach the allocatively efficient level of output.
-the marginal cost of production is 2 bottles of soda per bicycle.
-Both answers marginal benefit is greater than marginal cost and fewer bicycles should
be produced to reach the allocatively efficient level of output are correct. - ✔✔fewer
bicycles should be produced to reach the allocatively efficient level of output.
✔✔When an economist talks of scarcity, the economist is referring to the
-ability of society to employ all of its resources.
,-inability of society to satisfy all human wants because of limited resources.
-ability of society to consume all that it produces.
-ability of society to continually make technological breakthroughs and increase
production. - ✔✔inability of society to satisfy all human wants because of limited
resources.
✔✔Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can
produce either 2 units of X or 4 units of Y in an hour. There can be gains from exchange
-only if Agnes becomes faster at producing X.
-only if Brenda becomes faster at producing X or Y.
-if Agnes specializes in the production of Y and Brenda specializes in the production of
X.
-if Agnes specializes in the production of X and Brenda specializes in the production of
Y. - ✔✔if Agnes specializes in the production of X and Brenda specializes in the
production of Y.
✔✔In every economic system, choices must be made because resources are ________
and our wants are ________.
-unlimited; limited
-limited; limited
-limited; unlimited
-unlimited; unlimited - ✔✔limited; unlimited
✔✔The term human capital refers to
-people's knowledge and skill.
-entrepreneurship and risk-taking.
-labor resources used to make capital equipment.
-buildings and machinery. - ✔✔people's knowledge and skill.
✔✔In goods markets ________ and in factor markets ________.
-households sell to firms; households sell to firms
-firms sell to households; households sell to firms
-households sell to firms; firms sell to households
-firms sell to households; firms sell to households - ✔✔firms sell to households;
households sell to firms
✔✔The social arrangement that gives John Grisham, the writer of best-selling novels,
the ownership of his novels is
-a market.
-dynamic comparative advantage.
-absolute advantage.
-property rights. - ✔✔property rights.
✔✔The figure above illustrates Mary's production possibilities frontier. If Mary wants to
move from point b to point c, she must
, -give up some of good X in order to obtain more of good Y.
-give up some of good Y in order to obtain more of good X.
-improve technology.
-increase the accumulation of capital. - ✔✔give up some of good Y in order to obtain
more of good X.
✔✔Which factor of production earns profit?
-land
-money
-entrepreneurship
-human capital - ✔✔entrepreneurship
✔✔Which of the following is an example of a positive statement?
-The foreign sector should be more tightly controlled.
-Households are the primary source of saving.
-Government should not redistribute income.
-Business firms ought to contribute more to charities. - ✔✔Households are the primary
source of saving.
✔✔Households are the primary source of saving.
-More goods are produced than services.
-More services are produced than goods.
-The economy is too complex to determine the proportion of production that is devoted
to producing services.
-Production is divided evenly between goods and services. - ✔✔More services are
produced than goods.
✔✔The quantity of shoes produced is measured along the horizontal axis of a PPF and
the quantity of shirts is measured along the vertical axis. As you move down toward the
right along the PPF, the marginal cost of
-shirts increases.
-shoes increases.
-shoes decreases.
-shoes and shirts is equal at the midpoint between the vertical and horizontal axis. -
✔✔shoes increases
✔✔Which of the following is TRUE regarding markets?
I) Economists define a market as a geographic location where trade occurs.
II) A market enables buyers and sellers to get information about each other and to buy
and sell from each other.
III) Markets coordinate decisions through prices.
-I only
-I and III
-II and III
-I, II and III - ✔✔II and III
AND ANSWERS SURE A+
✔✔In one day, Brandon can either plow 10 acres or plant 20 acres. In one day,
Christopher can either plow 14 acres or plant 14 acres. Brandon and Christopher can
-exchange, but only Brandon will gain from the exchange.
-gain from exchange if Brandon specializes in plowing and Christopher specializes in
planting.
-exchange, but only Christopher will gain from the exchange.
-gain from exchange if Brandon specializes in planting and Christopher specializes in
plowing. - ✔✔gain from exchange if Brandon specializes in planting and Christopher
specializes in plowing.
✔✔During the summer you have made the decision to attend summer school, which
prevents you from working at your usual summer job in which you normally earn $6,000
for the summer. Your tuition cost is $3,000 and books and supplies cost $1,300. In
terms of dollars, the opportunity cost of attending summer school is
$4,300.
$3,300.
$6,000.
$10,300. - ✔✔$10,300.
✔✔As we increase the production of computers, we find that we must give up larger
and larger amounts of DVD players per computer.
,-DVD players will be more highly regarded by consumers than computers.
-This situation illustrates increasing opportunity cost.
-As a result, we should specialize in the production of DVD players.
-The production possibilities frontier for computers and DVD players is a straight line. -
✔✔This situation illustrates increasing opportunity cost.
✔✔Suppose a scientific breakthrough made free solar power available in unlimited
quantities in the United States. The effect of this invention would be to move the
-U.S. production possibilities frontier outward.
-United States beyond its production possibilities frontier.
-U.S. production possibilities frontier inward.
-United States inside its production possibilities frontier. - ✔✔U.S. production
possibilities frontier outward.
✔✔When a firm decides to produce more electric cars and conventional gas powered
cars, it is most directly answering the ________ part of one of the two big economic
questions.
-"how"
-"scarcity"
-"for whom"
-"what" - ✔✔"what"
✔✔In the figure above, a point showing an inefficient production point is point
A.
B.
C.
D. - ✔✔D.
✔✔Human resources that perform the functions of organizing, managing, and
assembling the other resources are called
-venture capital.
-productive capital.
-entrepreneurship.
-physical capital. - ✔✔entrepreneurship.
✔✔In the above figure, if 4000 bicycles are produced per month,
-marginal benefit is greater than marginal cost.
-fewer bicycles should be produced to reach the allocatively efficient level of output.
-the marginal cost of production is 2 bottles of soda per bicycle.
-Both answers marginal benefit is greater than marginal cost and fewer bicycles should
be produced to reach the allocatively efficient level of output are correct. - ✔✔fewer
bicycles should be produced to reach the allocatively efficient level of output.
✔✔When an economist talks of scarcity, the economist is referring to the
-ability of society to employ all of its resources.
,-inability of society to satisfy all human wants because of limited resources.
-ability of society to consume all that it produces.
-ability of society to continually make technological breakthroughs and increase
production. - ✔✔inability of society to satisfy all human wants because of limited
resources.
✔✔Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can
produce either 2 units of X or 4 units of Y in an hour. There can be gains from exchange
-only if Agnes becomes faster at producing X.
-only if Brenda becomes faster at producing X or Y.
-if Agnes specializes in the production of Y and Brenda specializes in the production of
X.
-if Agnes specializes in the production of X and Brenda specializes in the production of
Y. - ✔✔if Agnes specializes in the production of X and Brenda specializes in the
production of Y.
✔✔In every economic system, choices must be made because resources are ________
and our wants are ________.
-unlimited; limited
-limited; limited
-limited; unlimited
-unlimited; unlimited - ✔✔limited; unlimited
✔✔The term human capital refers to
-people's knowledge and skill.
-entrepreneurship and risk-taking.
-labor resources used to make capital equipment.
-buildings and machinery. - ✔✔people's knowledge and skill.
✔✔In goods markets ________ and in factor markets ________.
-households sell to firms; households sell to firms
-firms sell to households; households sell to firms
-households sell to firms; firms sell to households
-firms sell to households; firms sell to households - ✔✔firms sell to households;
households sell to firms
✔✔The social arrangement that gives John Grisham, the writer of best-selling novels,
the ownership of his novels is
-a market.
-dynamic comparative advantage.
-absolute advantage.
-property rights. - ✔✔property rights.
✔✔The figure above illustrates Mary's production possibilities frontier. If Mary wants to
move from point b to point c, she must
, -give up some of good X in order to obtain more of good Y.
-give up some of good Y in order to obtain more of good X.
-improve technology.
-increase the accumulation of capital. - ✔✔give up some of good Y in order to obtain
more of good X.
✔✔Which factor of production earns profit?
-land
-money
-entrepreneurship
-human capital - ✔✔entrepreneurship
✔✔Which of the following is an example of a positive statement?
-The foreign sector should be more tightly controlled.
-Households are the primary source of saving.
-Government should not redistribute income.
-Business firms ought to contribute more to charities. - ✔✔Households are the primary
source of saving.
✔✔Households are the primary source of saving.
-More goods are produced than services.
-More services are produced than goods.
-The economy is too complex to determine the proportion of production that is devoted
to producing services.
-Production is divided evenly between goods and services. - ✔✔More services are
produced than goods.
✔✔The quantity of shoes produced is measured along the horizontal axis of a PPF and
the quantity of shirts is measured along the vertical axis. As you move down toward the
right along the PPF, the marginal cost of
-shirts increases.
-shoes increases.
-shoes decreases.
-shoes and shirts is equal at the midpoint between the vertical and horizontal axis. -
✔✔shoes increases
✔✔Which of the following is TRUE regarding markets?
I) Economists define a market as a geographic location where trade occurs.
II) A market enables buyers and sellers to get information about each other and to buy
and sell from each other.
III) Markets coordinate decisions through prices.
-I only
-I and III
-II and III
-I, II and III - ✔✔II and III
