ECO 2023 Final review UCF Study Guide
Questions with Actual Detailed Answers
2026-2027 Updated.
The four types of economic goods discussed at the beginning of the semester included: -
Answer public goods, club goods, private goods, and common goods (or common property
resources)
If a good is non-rival in consumption then: - Answer one individual's consumption of the good
does not affect the amount available for others to consume
Interstate 4 (I-4) and State Road 408 are two major highways that affect traffic flows in Orlando.
Motorists are not required to pay a toll (user fee) to drive on Interstate 4, whereas they are
required to pay a toll (user fee) to drive on State Road 408. If at a given time of day Interstate 4
is uncongested, then it could be considered to possess the properties of a: - Answer public
good
Some sub-Saharan nations of Africa have resource stocks that have been depleted over time to
the point where much of the landscape has turned from productive farmland to desert. This
suggests that: - Answer the production possibilities curves of such nations have shifted inward
If a country has a comparative advantage in the production of a good over another country,
then it can:
i. engage in mutually beneficial trade with other countries
ii. increase the variety of products that it can consume without increasing its use of resources
iii. consume a combination of goods that lies outside its production possibilities frontier
iv. produce a combination of goods that lies outside its production possibilities frontier - Answer
i, ii, and iii
Suppose that for each bottle of wine France produces it must forego the production of 25
pounds of cheese and that for each bottle of wine Italy produces it must forego the production
of 10 pounds of cheese. It follows that: - Answer France has a comparative advantage in the
production of cheese
From a production possibilities curve (or frontier) it may be concluded that: - Answer if an
economy's resources are fully employed, then production of some goods must be sacrificed if
resources are allocated to the production of other goods
Consider a country that uses it resources to produce consumer goods (e.g., cars and housing)
and to provide infrastructure (e.g., roads and bridges). If a change in government policy results
,in greater production of consumer goods and infrastructure with the same amount of available
resources (e.g., the size of the labor force and stocks of natural resources do not change), then:
- Answer the country's resources were under-utilized or resources were being used
inefficiently prior to the policy change
If a country has a comparative advantage in the production of a good over another country, this
means that it has the ability to produce the good: - Answer at a lower opportunity cost than
the other country
Suppose an individual has an absolute advantage over other individuals in completing a
particular task. It follows that the individual: - Answer can accomplish the task using fewer
resources than other individuals
Markets for goods and services appear in a number of forms. In perfectly (or purely)
competitive markets:
i. there are large numbers of independently acting buyers and sellers
ii. the good that is produced and traded is homogenous or standardized
iii. an individual buyer can affect the market price whereas an individual seller can not
iv. an individual seller can affect the market price whereas an individual buyer can not - Answer
i and ii
The income effect, substitution effect, and diminishing marginal utility are all explanations for:
-the effect that changing a good from being rival to being non-rival has on quantity supplied
-the effect that changing a good from being non-rival to being rival has on quantity demanded
-why demand curves are upward sloping (i.e., positively sloped)
-why supply curves are downward sloping (i.e., negatively sloped) - Answer none of the above
are correct
From an individual's demand curve for a good, which of the following may be determined?
i. the quantity demanded at a given price, holding all other factors constant
ii. the total expenditures on the good at a given price, holding all other factors constant
iii. how quantity demanded changes if the price of the good changes, holding all other factors
constant - Answer i, ii, and iii
A good's 'choke price' is the dollar amount at which none of the good will be purchased and
below which units will be purchased. If an individual's demand function for a good is given by
the linear equation Q = 80 - 0.25P, then the choke price is: - Answer $320
, Consider the market for two goods, say X and Y, each of which has a downward sloping market
demand curve. Suppose the amount of X that consumers purchase per period depends upon its
price and the price of Y; similarly, the amount of Y that consumers purchase per period depends
upon its price and the price of X. Given this information, which of the following is/are true?
i. if consumers confront an increase in the price of Y, the demand for Y will decrease
ii. if consumers confront an increase in the price of Y, the demand for X will decrease if Y and X
are substitutes
iii. if consumers confront an increase in the price of Y, the demand for X will increase if Y and X
are substitutes
iv. if consumers confront an increase in the price of Y, the demand for X will increase if Y and X
are complements
v. if consumers confront an increase in the price of Y, the demand for X will decrease if Y and X
are complements - Answer iii and v
If the demand for a good declines as a result of an increase in consumer income, then the good
is said to be: - Answer an inferior good
If the demand curve for a good is vertical, then it may be concluded that: - Answer quantity
demanded is completely insensitive to changes in price and the law of demand fails to hold
Suppose the market demand curve for a good is represented by the linear equation Q = 60 -
0.75P. If the market price were to increase from P = $20 to P = $40, then holding all other
factors constant: - Answer the quantity demanded would decrease by 15 units and total
expenditures on the good would increase by $300
The law of supply states that:
i. as the price of a good increases, quantity supplied will increase, holding all other factors
constant
ii. as the price of a good decreases, quantity supplied will decrease, holding all other factors
constant
iii. as the price of a good increases, supply will increase
iv. as the price of a good decreases, supply will decrease
v. as the price of a good increases, quantity supplied will increase
vi. as the price of a good decreases, quantity supplied will decrease
vii. as the price of a good increases, supply will increase, holding all other factors constant
viii. as the price of a good decreases, supply will decrease, holding all other factors constant -
Answer i and ii
A firm's supply curve for a good indicates:
i. the minimum quantity supplied at each price, holding all other factors constant
Questions with Actual Detailed Answers
2026-2027 Updated.
The four types of economic goods discussed at the beginning of the semester included: -
Answer public goods, club goods, private goods, and common goods (or common property
resources)
If a good is non-rival in consumption then: - Answer one individual's consumption of the good
does not affect the amount available for others to consume
Interstate 4 (I-4) and State Road 408 are two major highways that affect traffic flows in Orlando.
Motorists are not required to pay a toll (user fee) to drive on Interstate 4, whereas they are
required to pay a toll (user fee) to drive on State Road 408. If at a given time of day Interstate 4
is uncongested, then it could be considered to possess the properties of a: - Answer public
good
Some sub-Saharan nations of Africa have resource stocks that have been depleted over time to
the point where much of the landscape has turned from productive farmland to desert. This
suggests that: - Answer the production possibilities curves of such nations have shifted inward
If a country has a comparative advantage in the production of a good over another country,
then it can:
i. engage in mutually beneficial trade with other countries
ii. increase the variety of products that it can consume without increasing its use of resources
iii. consume a combination of goods that lies outside its production possibilities frontier
iv. produce a combination of goods that lies outside its production possibilities frontier - Answer
i, ii, and iii
Suppose that for each bottle of wine France produces it must forego the production of 25
pounds of cheese and that for each bottle of wine Italy produces it must forego the production
of 10 pounds of cheese. It follows that: - Answer France has a comparative advantage in the
production of cheese
From a production possibilities curve (or frontier) it may be concluded that: - Answer if an
economy's resources are fully employed, then production of some goods must be sacrificed if
resources are allocated to the production of other goods
Consider a country that uses it resources to produce consumer goods (e.g., cars and housing)
and to provide infrastructure (e.g., roads and bridges). If a change in government policy results
,in greater production of consumer goods and infrastructure with the same amount of available
resources (e.g., the size of the labor force and stocks of natural resources do not change), then:
- Answer the country's resources were under-utilized or resources were being used
inefficiently prior to the policy change
If a country has a comparative advantage in the production of a good over another country, this
means that it has the ability to produce the good: - Answer at a lower opportunity cost than
the other country
Suppose an individual has an absolute advantage over other individuals in completing a
particular task. It follows that the individual: - Answer can accomplish the task using fewer
resources than other individuals
Markets for goods and services appear in a number of forms. In perfectly (or purely)
competitive markets:
i. there are large numbers of independently acting buyers and sellers
ii. the good that is produced and traded is homogenous or standardized
iii. an individual buyer can affect the market price whereas an individual seller can not
iv. an individual seller can affect the market price whereas an individual buyer can not - Answer
i and ii
The income effect, substitution effect, and diminishing marginal utility are all explanations for:
-the effect that changing a good from being rival to being non-rival has on quantity supplied
-the effect that changing a good from being non-rival to being rival has on quantity demanded
-why demand curves are upward sloping (i.e., positively sloped)
-why supply curves are downward sloping (i.e., negatively sloped) - Answer none of the above
are correct
From an individual's demand curve for a good, which of the following may be determined?
i. the quantity demanded at a given price, holding all other factors constant
ii. the total expenditures on the good at a given price, holding all other factors constant
iii. how quantity demanded changes if the price of the good changes, holding all other factors
constant - Answer i, ii, and iii
A good's 'choke price' is the dollar amount at which none of the good will be purchased and
below which units will be purchased. If an individual's demand function for a good is given by
the linear equation Q = 80 - 0.25P, then the choke price is: - Answer $320
, Consider the market for two goods, say X and Y, each of which has a downward sloping market
demand curve. Suppose the amount of X that consumers purchase per period depends upon its
price and the price of Y; similarly, the amount of Y that consumers purchase per period depends
upon its price and the price of X. Given this information, which of the following is/are true?
i. if consumers confront an increase in the price of Y, the demand for Y will decrease
ii. if consumers confront an increase in the price of Y, the demand for X will decrease if Y and X
are substitutes
iii. if consumers confront an increase in the price of Y, the demand for X will increase if Y and X
are substitutes
iv. if consumers confront an increase in the price of Y, the demand for X will increase if Y and X
are complements
v. if consumers confront an increase in the price of Y, the demand for X will decrease if Y and X
are complements - Answer iii and v
If the demand for a good declines as a result of an increase in consumer income, then the good
is said to be: - Answer an inferior good
If the demand curve for a good is vertical, then it may be concluded that: - Answer quantity
demanded is completely insensitive to changes in price and the law of demand fails to hold
Suppose the market demand curve for a good is represented by the linear equation Q = 60 -
0.75P. If the market price were to increase from P = $20 to P = $40, then holding all other
factors constant: - Answer the quantity demanded would decrease by 15 units and total
expenditures on the good would increase by $300
The law of supply states that:
i. as the price of a good increases, quantity supplied will increase, holding all other factors
constant
ii. as the price of a good decreases, quantity supplied will decrease, holding all other factors
constant
iii. as the price of a good increases, supply will increase
iv. as the price of a good decreases, supply will decrease
v. as the price of a good increases, quantity supplied will increase
vi. as the price of a good decreases, quantity supplied will decrease
vii. as the price of a good increases, supply will increase, holding all other factors constant
viii. as the price of a good decreases, supply will decrease, holding all other factors constant -
Answer i and ii
A firm's supply curve for a good indicates:
i. the minimum quantity supplied at each price, holding all other factors constant
