ECON 2030- EXAM 1 PRACTICE
QUESTIONS AND ANSWERS 100% PASS
2026 EDITION
What is an economic model? - ANS It is a simplified version of some aspect of economic life
used to analyze an economic issue.
In a purely market economy, who decides what goods and services will be produced? -
ANS consumers and producers
Productive efficiency is achieved when firms produce goods and services - ANS at the lowest
cost.
Which of the following is a macroeconomic question? - ANS What determines the
unemployment rate?
If a graph has a line that shows the quantity of flat-screen televisions sold in the last five years,
it is known as - ANS a time-series graph.
Which of the following will not shift the demand curve for a good? - ANS an increase in the
price of the good
One would speak of a movement along a supply curve for a good, rather than a change in a
supply, if - ANS the price of the good changes.
1
@2026 EDITION ALLRIGHTS RESERVED
, Refer to Figure 3-4. At a price of $20, how many units will be supplied? - ANS 600
Suppose that when the price of ice cream increases, Liza decreases her purchase of hot fudge.
To Liza, - ANS ice cream and hot fudge are complements.
Which of the following would shift the supply curve for energy drinks to the left? - ANS a
decrease in the number of firms that produce energy drinks
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply
curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt
when the price of ice cream, a substitute product, increases? - ANS Panel (c)
Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the
market for solar panels if the government offers tax breaks to encourage manufactures to
produce more solar panels? - ANS S increases, D no change, P decreases, Q increases.
Which of the following statements is true? - ANS A decreases causes the equilibrium price to
fall; the decrease in price then results in a decrease in quantity supplied.
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the
market for motorcycles at the intersection D1 and S2 (point B). Assume that Motorcycles are a
normal good. If there is an increase in number of companies producing motorcycles and a
decrease in income (assume motorcycles are a normal good), the equilibrium could move to
which point? - ANS C
Gross domestic product is calculated by summing up - ANS the total market value of final
goods and services produced in the economy during a period of time.
Refer to Table 8-4. Consider the data above (in billions of dollars) for an economy: Gross
domestic product )in billions of dollars) for this economy equals - ANS $1,600.
"Household production" refers to - ANS goods and services people produce for themselves.
2
@2026 EDITION ALLRIGHTS RESERVED
QUESTIONS AND ANSWERS 100% PASS
2026 EDITION
What is an economic model? - ANS It is a simplified version of some aspect of economic life
used to analyze an economic issue.
In a purely market economy, who decides what goods and services will be produced? -
ANS consumers and producers
Productive efficiency is achieved when firms produce goods and services - ANS at the lowest
cost.
Which of the following is a macroeconomic question? - ANS What determines the
unemployment rate?
If a graph has a line that shows the quantity of flat-screen televisions sold in the last five years,
it is known as - ANS a time-series graph.
Which of the following will not shift the demand curve for a good? - ANS an increase in the
price of the good
One would speak of a movement along a supply curve for a good, rather than a change in a
supply, if - ANS the price of the good changes.
1
@2026 EDITION ALLRIGHTS RESERVED
, Refer to Figure 3-4. At a price of $20, how many units will be supplied? - ANS 600
Suppose that when the price of ice cream increases, Liza decreases her purchase of hot fudge.
To Liza, - ANS ice cream and hot fudge are complements.
Which of the following would shift the supply curve for energy drinks to the left? - ANS a
decrease in the number of firms that produce energy drinks
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply
curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt
when the price of ice cream, a substitute product, increases? - ANS Panel (c)
Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What happens in the
market for solar panels if the government offers tax breaks to encourage manufactures to
produce more solar panels? - ANS S increases, D no change, P decreases, Q increases.
Which of the following statements is true? - ANS A decreases causes the equilibrium price to
fall; the decrease in price then results in a decrease in quantity supplied.
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the
market for motorcycles at the intersection D1 and S2 (point B). Assume that Motorcycles are a
normal good. If there is an increase in number of companies producing motorcycles and a
decrease in income (assume motorcycles are a normal good), the equilibrium could move to
which point? - ANS C
Gross domestic product is calculated by summing up - ANS the total market value of final
goods and services produced in the economy during a period of time.
Refer to Table 8-4. Consider the data above (in billions of dollars) for an economy: Gross
domestic product )in billions of dollars) for this economy equals - ANS $1,600.
"Household production" refers to - ANS goods and services people produce for themselves.
2
@2026 EDITION ALLRIGHTS RESERVED
