ECON 2030 FINAL EXAM PRINCIPLES OF
MACROECONOMICS – LSU|400 VERIFIED QUESTIONS
AND CORRECT ANSWERS WITH RATIONALES|
GRADED A+
SECTION 1: BASIC ECONOMIC CONCEPTS & CALCULATIONS (Questions 1-50)
1. If the price of pineapple juice was $4.50 a gallon one year ago and it is
now $5.75 a gallon, what is the % change in the price of pineapple juice?
A) 7.8%
B) 12.4%
C) 27.8%
D) 57.5%
Correct Answer: C
Rationale: Percentage change = (New - Old)/Old × 100 = (5.75 - 4.50)/4.50
× 100 = 1.25/4.50 × 100 = 27.78%.
2. Real GDP was $23,223.9 billion in Q.2 of 2024. Real GDP was $23,685.5
billion in Q.2 of 2025. What was the % change in real GDP between 2024 and
2025?
A) 1.99%
B) 2.40%
C) -1.94%
D) -2.55%
Correct Answer: A
Rationale: Percentage change = (23,685.5 - 23,223.9)/23,223.9 × 100 =
461.6/23,223.9 × 100 = 1.99%.
3. The following equations represent the demand for and supply of dragon fruit:
QD = 20 - P
QS = -10 + 5P
What is the equilibrium price (P) and quantity (Q - in thousands) of dragon
fruit?
1
, A) P = $2; Q = 10
B) P = $5; Q = 15
C) P = $20; Q = 10
D) P = $5; Q = 5
Correct Answer: B
Rationale: Set QD = QS: 20 - P = -10 + 5P → 30 = 6P → P = 5. Q = 20 - 5 =
15.
4. The following equations represent demand and supply for silver pendants:
QD = 50 - 2P
QS = -10 + 2P
What are the equilibrium price (P) and equilibrium quantity (Q) of silver
pendants?
A) P=$10; Q=30
B) P=$50; Q=10
C) P=$20; Q=15
D) P=$15; Q=20
Correct Answer: D
Rationale: Set QD = QS: 50 - 2P = -10 + 2P → 60 = 4P → P = 15. Q = 50 -
2(15) = 20.
5. Which of the following approaches to measuring GDP is the least accurate?
A) The income approach
B) The expenditure approach
C) The value-added approach
D) All are equally accurate
Correct Answer: C (or D depending on context)
Rationale: The value-added approach is actually accurate but is often
considered less practical for aggregate measurement. The income and
expenditure approaches are the primary methods.
6. What is the opportunity cost of attending college?
A) Tuition only
2
, B) Books and supplies only
C) The value of the best alternative use of time and money
D) Room and board
Correct Answer: C
Rationale: Opportunity cost includes the value of the best alternative
foregone, which includes both monetary costs and foregone earnings.
7. Scarcity exists because:
A) Resources are unlimited
B) Wants are limited
C) Resources are limited while wants are unlimited
D) Technology is advanced
Correct Answer: C
Rationale: Scarcity arises because human wants exceed the available
resources to satisfy them.
8. Which of the following is NOT a factor of production?
A) Land
B) Labor
C) Capital
D) Money
Correct Answer: D
Rationale: Money is not a factor of production; it is a medium of
exchange. Factors of production are land, labor, capital, and
entrepreneurship.
9. A production possibilities frontier (PPF) shows:
A) The maximum combination of two goods that can be produced
B) The minimum combination of two goods that can be produced
C) The actual production of an economy
D) The demand for goods
Correct Answer: A
Rationale: The PPF shows the maximum possible combinations of two goods
3
, that can be produced with available resources and technology.
10. A point inside the PPF represents:
A) Efficient production
B) Inefficient production
C) Unattainable production
D) Economic growth
Correct Answer: B
Rationale: Points inside the PPF represent inefficient use of resources
(unemployment or underutilization).
11. A point outside the PPF represents:
A) Efficient production
B) Inefficient production
C) Unattainable production
D) Economic growth
Correct Answer: C
Rationale: Points outside the PPF are unattainable with current resources
and technology.
12. Economic growth is shown on a PPF as:
A) A movement from inside to on the PPF
B) An outward shift of the PPF
C) An inward shift of the PPF
D) A movement along the PPF
Correct Answer: B
Rationale: Economic growth expands productive capacity, shifting the PPF
outward.
13. The law of increasing opportunity costs states that:
A) Opportunity costs decrease as production increases
B) Opportunity costs increase as production increases
C) Opportunity costs remain constant
4
MACROECONOMICS – LSU|400 VERIFIED QUESTIONS
AND CORRECT ANSWERS WITH RATIONALES|
GRADED A+
SECTION 1: BASIC ECONOMIC CONCEPTS & CALCULATIONS (Questions 1-50)
1. If the price of pineapple juice was $4.50 a gallon one year ago and it is
now $5.75 a gallon, what is the % change in the price of pineapple juice?
A) 7.8%
B) 12.4%
C) 27.8%
D) 57.5%
Correct Answer: C
Rationale: Percentage change = (New - Old)/Old × 100 = (5.75 - 4.50)/4.50
× 100 = 1.25/4.50 × 100 = 27.78%.
2. Real GDP was $23,223.9 billion in Q.2 of 2024. Real GDP was $23,685.5
billion in Q.2 of 2025. What was the % change in real GDP between 2024 and
2025?
A) 1.99%
B) 2.40%
C) -1.94%
D) -2.55%
Correct Answer: A
Rationale: Percentage change = (23,685.5 - 23,223.9)/23,223.9 × 100 =
461.6/23,223.9 × 100 = 1.99%.
3. The following equations represent the demand for and supply of dragon fruit:
QD = 20 - P
QS = -10 + 5P
What is the equilibrium price (P) and quantity (Q - in thousands) of dragon
fruit?
1
, A) P = $2; Q = 10
B) P = $5; Q = 15
C) P = $20; Q = 10
D) P = $5; Q = 5
Correct Answer: B
Rationale: Set QD = QS: 20 - P = -10 + 5P → 30 = 6P → P = 5. Q = 20 - 5 =
15.
4. The following equations represent demand and supply for silver pendants:
QD = 50 - 2P
QS = -10 + 2P
What are the equilibrium price (P) and equilibrium quantity (Q) of silver
pendants?
A) P=$10; Q=30
B) P=$50; Q=10
C) P=$20; Q=15
D) P=$15; Q=20
Correct Answer: D
Rationale: Set QD = QS: 50 - 2P = -10 + 2P → 60 = 4P → P = 15. Q = 50 -
2(15) = 20.
5. Which of the following approaches to measuring GDP is the least accurate?
A) The income approach
B) The expenditure approach
C) The value-added approach
D) All are equally accurate
Correct Answer: C (or D depending on context)
Rationale: The value-added approach is actually accurate but is often
considered less practical for aggregate measurement. The income and
expenditure approaches are the primary methods.
6. What is the opportunity cost of attending college?
A) Tuition only
2
, B) Books and supplies only
C) The value of the best alternative use of time and money
D) Room and board
Correct Answer: C
Rationale: Opportunity cost includes the value of the best alternative
foregone, which includes both monetary costs and foregone earnings.
7. Scarcity exists because:
A) Resources are unlimited
B) Wants are limited
C) Resources are limited while wants are unlimited
D) Technology is advanced
Correct Answer: C
Rationale: Scarcity arises because human wants exceed the available
resources to satisfy them.
8. Which of the following is NOT a factor of production?
A) Land
B) Labor
C) Capital
D) Money
Correct Answer: D
Rationale: Money is not a factor of production; it is a medium of
exchange. Factors of production are land, labor, capital, and
entrepreneurship.
9. A production possibilities frontier (PPF) shows:
A) The maximum combination of two goods that can be produced
B) The minimum combination of two goods that can be produced
C) The actual production of an economy
D) The demand for goods
Correct Answer: A
Rationale: The PPF shows the maximum possible combinations of two goods
3
, that can be produced with available resources and technology.
10. A point inside the PPF represents:
A) Efficient production
B) Inefficient production
C) Unattainable production
D) Economic growth
Correct Answer: B
Rationale: Points inside the PPF represent inefficient use of resources
(unemployment or underutilization).
11. A point outside the PPF represents:
A) Efficient production
B) Inefficient production
C) Unattainable production
D) Economic growth
Correct Answer: C
Rationale: Points outside the PPF are unattainable with current resources
and technology.
12. Economic growth is shown on a PPF as:
A) A movement from inside to on the PPF
B) An outward shift of the PPF
C) An inward shift of the PPF
D) A movement along the PPF
Correct Answer: B
Rationale: Economic growth expands productive capacity, shifting the PPF
outward.
13. The law of increasing opportunity costs states that:
A) Opportunity costs decrease as production increases
B) Opportunity costs increase as production increases
C) Opportunity costs remain constant
4
