ASU ECN 212 Exam 2 Practice
Questions with Accurate Answers 2026-
2027 Update.
Public goods are:
A. separately consumed and non-excludable
B. separately consumed and excludable
C. jointly consumed and non-excludable
D. jointly consumed and excludable - Answer jointly consumed and non-excludable
A free rider is someone that is forced to pay for a good he or she does not want.
(T or F) - Answer False
The two major functions of government are:
A. predictive and protective
B. promotive and predictive
C. protective and productive
D. productive and predictive - Answer protective and productive
When there is a lack of competition, prices tend to be _________ than equilibrium price, while
the quantity produced tends to be ________ than equilibrium quantity.
A. higher, lower
B. lower, higher
C. lower, lower
D. higher, higher - Answer higher, lower
When positive externalities are present, the ________ curve ________ the total value of the
output.
A. demand, overstates
B. demand, understates
C. supply, overstates
D. supply, understates - Answer demand, understates
, When negative externalities are present, the ________ curve ________ the total value of the
output.
A. demand, overstates
B. supply, understates
C. demand, understates
D. supply, overstates - Answer demand, overstates
Which of the following is not a market response to markets with poor information?
A. warranties
B. brand names and franchises
C. consumer information publications
D. lower sales taxes - Answer lower sales taxes
A public good is identified as a public good depending on who produces it.
(T or F) - Answer False
Which of the following is necessary for economic efficiency?
A. all activities that provide individuals with more benefits than costs must be undertaken
B. no activities that provide benefits less than costs should be undertaken
C. all publicly provided goods must be made available to everyone
D. all of the above
E. Both A and B - Answer Both A and B
Anything worth doing is worth doing to the best of your ability.
(T or F) - Answer False
An industry is said to be perfectly competitive when:
A. supply in the industry is highly elastic.
A. supply in the industry is highly elastic.
B. there are many buyers and sellers, and each is large relative to the total market.
C. each firm has virtually no influence over the price of its product.
Questions with Accurate Answers 2026-
2027 Update.
Public goods are:
A. separately consumed and non-excludable
B. separately consumed and excludable
C. jointly consumed and non-excludable
D. jointly consumed and excludable - Answer jointly consumed and non-excludable
A free rider is someone that is forced to pay for a good he or she does not want.
(T or F) - Answer False
The two major functions of government are:
A. predictive and protective
B. promotive and predictive
C. protective and productive
D. productive and predictive - Answer protective and productive
When there is a lack of competition, prices tend to be _________ than equilibrium price, while
the quantity produced tends to be ________ than equilibrium quantity.
A. higher, lower
B. lower, higher
C. lower, lower
D. higher, higher - Answer higher, lower
When positive externalities are present, the ________ curve ________ the total value of the
output.
A. demand, overstates
B. demand, understates
C. supply, overstates
D. supply, understates - Answer demand, understates
, When negative externalities are present, the ________ curve ________ the total value of the
output.
A. demand, overstates
B. supply, understates
C. demand, understates
D. supply, overstates - Answer demand, overstates
Which of the following is not a market response to markets with poor information?
A. warranties
B. brand names and franchises
C. consumer information publications
D. lower sales taxes - Answer lower sales taxes
A public good is identified as a public good depending on who produces it.
(T or F) - Answer False
Which of the following is necessary for economic efficiency?
A. all activities that provide individuals with more benefits than costs must be undertaken
B. no activities that provide benefits less than costs should be undertaken
C. all publicly provided goods must be made available to everyone
D. all of the above
E. Both A and B - Answer Both A and B
Anything worth doing is worth doing to the best of your ability.
(T or F) - Answer False
An industry is said to be perfectly competitive when:
A. supply in the industry is highly elastic.
A. supply in the industry is highly elastic.
B. there are many buyers and sellers, and each is large relative to the total market.
C. each firm has virtually no influence over the price of its product.
