econ 2301 final Exam | Questions with
100% Solutions/Verified Answers
In the US economy - ANSWER Firms and Households are dependent upon each other.
The US is often called a 'service' economy because - ANSWER Almost 80% of what the US
produces are services.
Which of the following is NOT an essential part of an economy? - ANSWER Baseball (but it is
very important)
The production possibilities frontier illustrates the - ANSWER maximum combinations of goods
and services that can be produced.
Production efficiency occurs - ANSWER at all points on the production possibilities frontier.
Why is production efficiency important for an economy? - ANSWER Because if we are using
all resources efficiently, the standard of living is higher.
The Corona Virus caused massive unemployment in the US and world economies. In terms of
the PPF, the - ANSWER economy is producing at a point inside the production possibilities
frontier.
The figure above shows the production possibilities frontier for a country. In order for it to
produce at point E, the - ANSWER country would need to acquire more resources and/or more
advanced technology.
,Before the Corona Virus, the US was on its PPF. This means that - ANSWER if the US
wanted more health care, it would have to sacrifice production of something else.
Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the
above figure is the PPF for hotels and consumption goods in the two areas. Hotels are a capital
good that, once built, will help produce still more consumption goods. If Puerto Rico produces
more hotels than Hawaii, - ANSWER Puerto Rico's PPF will shift outward further than Hawaii's
PPF.
Deb and Pete have volunteered to help their favorite charity mail out fundraiser
information. The figure above shows their production possibilities frontiers for assembling
packets and stuffing envelopes. What is Deb's opportunity cost of assembling 1 packet? -
ANSWER 4 envelopes
Deb and Pete have volunteered to help their favorite charity mail out fundraiser
information. The figure above shows their production possibilities frontiers for assembling
packets and stuffing envelopes. Which of the following statements is correct? - ANSWER Deb
has a comparative advantage in stuffing envelopes.
The US exports electrical machinery to Mexico and imports avocados from Mexico. Why? -
ANSWER The US has a comparative advantage in electrical machinery and Mexico has a
comparative advantage in avocados.
When people and countries specialize and trade - ANSWER both can increase their standard
of living
Most markets are not as direct as a face-to-face auction, but we can see the results of
markets in our everyday lives as - ANSWER all of the above
The "law of demand" refers to the fact that, other things remaining the same, when the price of
a good rises, - ANSWER there is a movement up along the demand curve to a smaller quantity
demanded.
, Which statement is true about demand? - ANSWER Demand is the quantity people are willing
and able to buy at different prices
Consumers regard Dell computers and Apple computers as substitutes. If the price of a
Dell computer decreases, the - ANSWER demand for Apple computers decreases.
The figure above shows the market for iPods. Which of the following shifts the demand curve
from D0 to D2? - ANSWER a requirement that all student at universities have an iPod
Demand for sporting events is way down due to the Corona Virus. Of the following, which is the
best reason for the decrease in demand? - ANSWER a change in preferences
A new class is about to finish college and are about to start a high paying jobs. Because of these
upcoming new job, what will happen in the market for cars? - ANSWER The demand for cars will
increase
Which of the following decreases the demand for a good? - ANSWER an increase in
income, assuming the good is an inferior good
The law of supply states that, other things remaining the same, - ANSWER if the price of a
good increases, the quantity supplied increases
A supply curve - ANSWER Both answers B and C
Slopes downward
is a graph of the relationship between quantity supplied of a good and its price
Which of the following does NOT increase the supply of personal computers, that is, does NOT
shift the supply curve of personal computers? - ANSWER a rise the price of a personal computer
100% Solutions/Verified Answers
In the US economy - ANSWER Firms and Households are dependent upon each other.
The US is often called a 'service' economy because - ANSWER Almost 80% of what the US
produces are services.
Which of the following is NOT an essential part of an economy? - ANSWER Baseball (but it is
very important)
The production possibilities frontier illustrates the - ANSWER maximum combinations of goods
and services that can be produced.
Production efficiency occurs - ANSWER at all points on the production possibilities frontier.
Why is production efficiency important for an economy? - ANSWER Because if we are using
all resources efficiently, the standard of living is higher.
The Corona Virus caused massive unemployment in the US and world economies. In terms of
the PPF, the - ANSWER economy is producing at a point inside the production possibilities
frontier.
The figure above shows the production possibilities frontier for a country. In order for it to
produce at point E, the - ANSWER country would need to acquire more resources and/or more
advanced technology.
,Before the Corona Virus, the US was on its PPF. This means that - ANSWER if the US
wanted more health care, it would have to sacrifice production of something else.
Suppose Puerto Rico and Hawaii currently have the same production possibilities so that the
above figure is the PPF for hotels and consumption goods in the two areas. Hotels are a capital
good that, once built, will help produce still more consumption goods. If Puerto Rico produces
more hotels than Hawaii, - ANSWER Puerto Rico's PPF will shift outward further than Hawaii's
PPF.
Deb and Pete have volunteered to help their favorite charity mail out fundraiser
information. The figure above shows their production possibilities frontiers for assembling
packets and stuffing envelopes. What is Deb's opportunity cost of assembling 1 packet? -
ANSWER 4 envelopes
Deb and Pete have volunteered to help their favorite charity mail out fundraiser
information. The figure above shows their production possibilities frontiers for assembling
packets and stuffing envelopes. Which of the following statements is correct? - ANSWER Deb
has a comparative advantage in stuffing envelopes.
The US exports electrical machinery to Mexico and imports avocados from Mexico. Why? -
ANSWER The US has a comparative advantage in electrical machinery and Mexico has a
comparative advantage in avocados.
When people and countries specialize and trade - ANSWER both can increase their standard
of living
Most markets are not as direct as a face-to-face auction, but we can see the results of
markets in our everyday lives as - ANSWER all of the above
The "law of demand" refers to the fact that, other things remaining the same, when the price of
a good rises, - ANSWER there is a movement up along the demand curve to a smaller quantity
demanded.
, Which statement is true about demand? - ANSWER Demand is the quantity people are willing
and able to buy at different prices
Consumers regard Dell computers and Apple computers as substitutes. If the price of a
Dell computer decreases, the - ANSWER demand for Apple computers decreases.
The figure above shows the market for iPods. Which of the following shifts the demand curve
from D0 to D2? - ANSWER a requirement that all student at universities have an iPod
Demand for sporting events is way down due to the Corona Virus. Of the following, which is the
best reason for the decrease in demand? - ANSWER a change in preferences
A new class is about to finish college and are about to start a high paying jobs. Because of these
upcoming new job, what will happen in the market for cars? - ANSWER The demand for cars will
increase
Which of the following decreases the demand for a good? - ANSWER an increase in
income, assuming the good is an inferior good
The law of supply states that, other things remaining the same, - ANSWER if the price of a
good increases, the quantity supplied increases
A supply curve - ANSWER Both answers B and C
Slopes downward
is a graph of the relationship between quantity supplied of a good and its price
Which of the following does NOT increase the supply of personal computers, that is, does NOT
shift the supply curve of personal computers? - ANSWER a rise the price of a personal computer
