LSU ECON 2030 Final Exam Questions and
Correct Answers
Question 1
Suppose the government imposes an excise tax of $10 per unit on bicycles. Suppose
further that buyers bear 65 percent of the burden of the tax.
After the tax is imposed, the price the sellers receive for selling a bicycle will be ______
than it was before the tax, everything else held constant.
a) $3.50 higher
b) $3.50 lower
c) $10.00 higher
d) $6.50 lower
e) $6.50 higher
Correct Answer
b) $3.50 lower
Question 2
quantity price total cost
0 15 25
1 15 40
2 15 45
3 15 55
4 15 70
5 15 90
In the situation above, the price of the good will be _________ 15 in the long run,
everything else held constant.
a) equal to
b) greater than
c) less than
Correct Answer
b) greater than
Page 1 of 93
,Question 3
Wine Cloth
England 72 8
Portugal 49 7
The table above depicts England and Portugal's __________ each good.
a) production of
b) efficiency at
c) opportunity cost of
d) productivity at
Correct Answer
d) productivity at
Question 4
Month/Year Unemploy. Rate Month/Year Unemploy. Rate
January 1952 3.2% July 1952 3.2%
February 1952 3.1% August 1952 3.4%
March 1952 2.9% September 1952 3.1%
April 1952 2.9% October 1952 3.0%
May 1952 3.0% November 1952 2.8%
June 1952 3.0% December 1952 2.7%
Which of the following would increase the consumption component of U.S. GDP?
A.) A Baton Rouge resident purchases 100 shares of Amazon.com stock
B.) A Baton Rouge resident purchases a new washing machine produced in South
Korea for use in her home.
C.) Walmart, a U.S. company, builds a new store in Oklahoma.
D.) LSU purchases a new computer produced in the U.S. for Charles to use in his
office.
E.) LSU purchases a new computer produced in China for Charles to use in his office.
Correct Answer
B.) A Baton Rouge resident purchases a new washing machine produced in South
Korea for use in her home.
Page 2 of 93
,Question 5
In 1958, Mary Douglas published an article about the economy of the Lele people of
the Belgian Congo (today called the Democratic Republic of the Congo). In the article,
she described the functions of raffia cloth, a well-combed and closely woven cloth of
superior quality, in this society. Among its other uses, raffia cloth was used in making
a bridewealth payment--the payment was made by a groom`s kin to the kin of the
bride. Used in this way, raffia cloth was serving which of the following functions of
money?
A.) Standard of value
B.) Means of unilateral payment
C.) Standard of deferred payment
D.) Medium of exchange
E.) Store of value
Correct Answer
B.) Means of unilateral payment
Question 6
Suppose, at a given point in time, Snappy Shack operates in a perfectly competitive
market and is producing its profit-maximizing level of output. Suppose further that at
this level of production, Snappy's average total cost of producing snacks is $1.70,
average variable cost is $1.25, and marginal cost is $1.60.
In the situation above, the price of snacks is _________ in the short run.
a) $0.45
b) $1.25
c) $1.60
d) $1.70
e) $2.85
Correct Answer
c) $1.60
Page 3 of 93
, Question 7
Suppose pens and pencils are substitutes in consumption. Suppose further that
demand for pens increases.
In the situation above, the equilibrium price of pens will _____, everything else held
constant.
a) decrease
b) remain unchanged
c) increase
Correct Answer
c) increase
equilibrium price: suppliers
-Because the demand for pens went up, so will the price (more people are buying
their products, so increase price)
Question 8
Suppose the ration and chic Amber saw a beautiful pair of shoes priced at $995 and
she bought them. Suppose further that her consumer surplus from the purchase was
$200. It can be concluded with certainty that her reservation price for buying the
loafers was
a) $0
b) $200
c) $795
d) $995
e) $1195
Correct Answer
e) $1195
Page 4 of 93
Correct Answers
Question 1
Suppose the government imposes an excise tax of $10 per unit on bicycles. Suppose
further that buyers bear 65 percent of the burden of the tax.
After the tax is imposed, the price the sellers receive for selling a bicycle will be ______
than it was before the tax, everything else held constant.
a) $3.50 higher
b) $3.50 lower
c) $10.00 higher
d) $6.50 lower
e) $6.50 higher
Correct Answer
b) $3.50 lower
Question 2
quantity price total cost
0 15 25
1 15 40
2 15 45
3 15 55
4 15 70
5 15 90
In the situation above, the price of the good will be _________ 15 in the long run,
everything else held constant.
a) equal to
b) greater than
c) less than
Correct Answer
b) greater than
Page 1 of 93
,Question 3
Wine Cloth
England 72 8
Portugal 49 7
The table above depicts England and Portugal's __________ each good.
a) production of
b) efficiency at
c) opportunity cost of
d) productivity at
Correct Answer
d) productivity at
Question 4
Month/Year Unemploy. Rate Month/Year Unemploy. Rate
January 1952 3.2% July 1952 3.2%
February 1952 3.1% August 1952 3.4%
March 1952 2.9% September 1952 3.1%
April 1952 2.9% October 1952 3.0%
May 1952 3.0% November 1952 2.8%
June 1952 3.0% December 1952 2.7%
Which of the following would increase the consumption component of U.S. GDP?
A.) A Baton Rouge resident purchases 100 shares of Amazon.com stock
B.) A Baton Rouge resident purchases a new washing machine produced in South
Korea for use in her home.
C.) Walmart, a U.S. company, builds a new store in Oklahoma.
D.) LSU purchases a new computer produced in the U.S. for Charles to use in his
office.
E.) LSU purchases a new computer produced in China for Charles to use in his office.
Correct Answer
B.) A Baton Rouge resident purchases a new washing machine produced in South
Korea for use in her home.
Page 2 of 93
,Question 5
In 1958, Mary Douglas published an article about the economy of the Lele people of
the Belgian Congo (today called the Democratic Republic of the Congo). In the article,
she described the functions of raffia cloth, a well-combed and closely woven cloth of
superior quality, in this society. Among its other uses, raffia cloth was used in making
a bridewealth payment--the payment was made by a groom`s kin to the kin of the
bride. Used in this way, raffia cloth was serving which of the following functions of
money?
A.) Standard of value
B.) Means of unilateral payment
C.) Standard of deferred payment
D.) Medium of exchange
E.) Store of value
Correct Answer
B.) Means of unilateral payment
Question 6
Suppose, at a given point in time, Snappy Shack operates in a perfectly competitive
market and is producing its profit-maximizing level of output. Suppose further that at
this level of production, Snappy's average total cost of producing snacks is $1.70,
average variable cost is $1.25, and marginal cost is $1.60.
In the situation above, the price of snacks is _________ in the short run.
a) $0.45
b) $1.25
c) $1.60
d) $1.70
e) $2.85
Correct Answer
c) $1.60
Page 3 of 93
, Question 7
Suppose pens and pencils are substitutes in consumption. Suppose further that
demand for pens increases.
In the situation above, the equilibrium price of pens will _____, everything else held
constant.
a) decrease
b) remain unchanged
c) increase
Correct Answer
c) increase
equilibrium price: suppliers
-Because the demand for pens went up, so will the price (more people are buying
their products, so increase price)
Question 8
Suppose the ration and chic Amber saw a beautiful pair of shoes priced at $995 and
she bought them. Suppose further that her consumer surplus from the purchase was
$200. It can be concluded with certainty that her reservation price for buying the
loafers was
a) $0
b) $200
c) $795
d) $995
e) $1195
Correct Answer
e) $1195
Page 4 of 93
