ASU ECON 211 COMPLETE TEST BANK
QUESTIONS AND VERIFIED CORRECT
ANSWERS
●● What is a normative statement?
Answer: Policymakers should increase the minimum wage to improve
standard of living.
●● The opportunity cost of helping a friend move is...
Answer: the next best use of the time and energy spent helping your
friend.
●● An entity has a comparative advantage if it can produce what?
Answer: At a lower opportunity cost than another entity.
●● T/F: Suppose the United States has an absolute advantage in the
production of oil and wheat. This means that the U.S. would not gain
from trading these goods.
Answer: FALSE
●● The United States has a comparative advantage in the production of
wheat and an absolute advantage in the production of both apples and
,wheat relative to Canada. If the U.S. and Canada specialize and trade,
the U.S. should produce what?
Answer: Wheat
●● The law of the demand states that if price rises, quantity demanded
does what?
Answer: Decreases
●● We would expect demand for cars to increase if...
Answer: The price of gasoline falls.
●● As income increases, consumers purchase more cars. Cars what type
of good?
Answer: Normal goods
●● Supply curves show the relationship between price and quantity
demanded. Assuming the law of supply holds, supply curves are what?
Answer: Upward sloping
●● Which causes a leftward shift in the supply curve for apples?
Answer: An increase in the price of labor
●● An increase in the equilibrium price of coffee could be caused by
, Answer: A decrease in supply of coffee.
●● What is Consumer surplus?
Answer: The amount a buyer is willing to pay for a good less the amount
the buyer actually pays.
●● When is a market is efficient?
Answer: The sum of consumer and producer surplus is maximized.
●● What is Producer surplus?
Answer: The difference between the price producers collect and the
minimum price required to bring goods to market.
●● Rent control is an example of what?
Answer: A price ceiling
●● A price ceiling on a coffee would likely cause what?
Answer: A shortage of coffee
●● What is minimum wage an example of?
Answer: A price floor
●● In the labor market, suppliers of labor are
QUESTIONS AND VERIFIED CORRECT
ANSWERS
●● What is a normative statement?
Answer: Policymakers should increase the minimum wage to improve
standard of living.
●● The opportunity cost of helping a friend move is...
Answer: the next best use of the time and energy spent helping your
friend.
●● An entity has a comparative advantage if it can produce what?
Answer: At a lower opportunity cost than another entity.
●● T/F: Suppose the United States has an absolute advantage in the
production of oil and wheat. This means that the U.S. would not gain
from trading these goods.
Answer: FALSE
●● The United States has a comparative advantage in the production of
wheat and an absolute advantage in the production of both apples and
,wheat relative to Canada. If the U.S. and Canada specialize and trade,
the U.S. should produce what?
Answer: Wheat
●● The law of the demand states that if price rises, quantity demanded
does what?
Answer: Decreases
●● We would expect demand for cars to increase if...
Answer: The price of gasoline falls.
●● As income increases, consumers purchase more cars. Cars what type
of good?
Answer: Normal goods
●● Supply curves show the relationship between price and quantity
demanded. Assuming the law of supply holds, supply curves are what?
Answer: Upward sloping
●● Which causes a leftward shift in the supply curve for apples?
Answer: An increase in the price of labor
●● An increase in the equilibrium price of coffee could be caused by
, Answer: A decrease in supply of coffee.
●● What is Consumer surplus?
Answer: The amount a buyer is willing to pay for a good less the amount
the buyer actually pays.
●● When is a market is efficient?
Answer: The sum of consumer and producer surplus is maximized.
●● What is Producer surplus?
Answer: The difference between the price producers collect and the
minimum price required to bring goods to market.
●● Rent control is an example of what?
Answer: A price ceiling
●● A price ceiling on a coffee would likely cause what?
Answer: A shortage of coffee
●● What is minimum wage an example of?
Answer: A price floor
●● In the labor market, suppliers of labor are
