ECON 104 FINAL EXAM
1. Examining the conditions that could lead to a recession in an economy is an
example of a macroeconomics topic.
Answer True
2. Every individual, no matter how rich or poor, is faced with making trade-offs.-
Answer True
3. When voluntary exchange takes place, only one party gains from the ex-
change.
Answer False
4. A college must decide if it wants to offer more Internet-based classes. This
decision involves answering the economic question of "what to produce."
Answer True
5. One desirable outcome of a market economy is that it leads to a more
,equitable distribution of income.
Answer False
6. An economic model is a simplified version of reality used to analyze real-world
economic situations.
Answer True
7. The decisions Apple makes in determining production levels for its iPhone is
an example of a macroeconomics topic.
Answer False
8. Economic resources are also called factors of production.
Answer true
9. A curved line has slope values that change at every point.
Answer true
10. A straight line has a slope of zero.
Answer false
11. If a country is producing efficiently and is on the production possibilities
,frontier, the only way to produce more of one good is to produce less of the
other.
Answer false
12. If a country produces only two goods, then it is not possible to have a
comparative advantage in the production of both those goods.
Answer true
13. Any output combination outside a production possibility frontier is associat-
ed with unused or underutilized resources.
Answer false
14. An increase in the labor force shifts the production possibility frontier in-
wards over time.
Answer false
15. If Sanjaya can shuck more oysters in one hour than Tatiana, then Sanjaya has
a comparative advantage in shucking oysters.
Answer false
, 16. The basis for trade is comparative advantage, not absolute advantage.
Answer True
17. In a two-good, two country world, if one country has an absolute advantage
in the production of both goods, it cannot benefit by trading with the other
country.
Answer false
1. Examining the conditions that could lead to a recession in an economy is an
example of a macroeconomics topic.
Answer True
2. Every individual, no matter how rich or poor, is faced with making trade-offs.-
Answer True
3. When voluntary exchange takes place, only one party gains from the ex-
change.
Answer False
4. A college must decide if it wants to offer more Internet-based classes. This
decision involves answering the economic question of "what to produce."
Answer True
5. One desirable outcome of a market economy is that it leads to a more
,equitable distribution of income.
Answer False
6. An economic model is a simplified version of reality used to analyze real-world
economic situations.
Answer True
7. The decisions Apple makes in determining production levels for its iPhone is
an example of a macroeconomics topic.
Answer False
8. Economic resources are also called factors of production.
Answer true
9. A curved line has slope values that change at every point.
Answer true
10. A straight line has a slope of zero.
Answer false
11. If a country is producing efficiently and is on the production possibilities
,frontier, the only way to produce more of one good is to produce less of the
other.
Answer false
12. If a country produces only two goods, then it is not possible to have a
comparative advantage in the production of both those goods.
Answer true
13. Any output combination outside a production possibility frontier is associat-
ed with unused or underutilized resources.
Answer false
14. An increase in the labor force shifts the production possibility frontier in-
wards over time.
Answer false
15. If Sanjaya can shuck more oysters in one hour than Tatiana, then Sanjaya has
a comparative advantage in shucking oysters.
Answer false
, 16. The basis for trade is comparative advantage, not absolute advantage.
Answer True
17. In a two-good, two country world, if one country has an absolute advantage
in the production of both goods, it cannot benefit by trading with the other
country.
Answer false
