ECN211 ASU FINAL EXAM
ACTUAL
QUESTIONS AND COMPLETE
SOLUTIONS LATEST UPDATE
2026/2027
GRADED A+ .
, 1. What does a production possibilities frontier display✔✔ CORRECT ANSWER Possible combinations of output an economy can
produce given available factors of production and technology.
2. What is a normative statement✔✔ CORRECT ANSWER Policymakers should increase the minimum wage to improve standard of living.
3. The opportunity cost of helping a friend move is...: the next best use of the time and energy spent helping your friend.
4. An entity has a comparative advantage if it can produce what✔✔ CORRECT ANSWER At a lower opportunity
cost than another entity.
5. 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.: FALSE
6. 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✔✔ CORRECT ANSWER Wheat
7. The law of the demand states that if price rises, quantity demanded does what✔✔ CORRECT ANSWER
Decreases
8. We would expect demand for cars to increase if...: The price of gasoline falls.
9. As income increases, consumers purchase more cars. Cars what type of good✔✔ CORRECT ANSWER
Normal goods
10. Supply curves show the relationship between price and quantity demand-ed. Assuming the law of supply
holds, supply curves are what✔✔ CORRECT ANSWER Upward sloping
11. Which causes a leftward shift in the supply curve for apples✔✔ CORRECT ANSWER An increase in the price of labor
12. An increase in the equilibrium price of coffee could be caused by: A decrease in supply of cottee.
13. What is Consumer surplus✔✔ CORRECT ANSWER The amount a buyer is willing to pay for a good less the amount the buyer actually pays.
14. When is a market is efficient✔✔ CORRECT ANSWER The sum of consumer and producer surplus is maximized.
15. What is Producer surplus✔✔ CORRECT ANSWER The ditterence between the price producers collect and the minimum price required to bring
goods to market.
16. Rent control is an example of what✔✔ CORRECT ANSWER A price ceiling
ACTUAL
QUESTIONS AND COMPLETE
SOLUTIONS LATEST UPDATE
2026/2027
GRADED A+ .
, 1. What does a production possibilities frontier display✔✔ CORRECT ANSWER Possible combinations of output an economy can
produce given available factors of production and technology.
2. What is a normative statement✔✔ CORRECT ANSWER Policymakers should increase the minimum wage to improve standard of living.
3. The opportunity cost of helping a friend move is...: the next best use of the time and energy spent helping your friend.
4. An entity has a comparative advantage if it can produce what✔✔ CORRECT ANSWER At a lower opportunity
cost than another entity.
5. 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.: FALSE
6. 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✔✔ CORRECT ANSWER Wheat
7. The law of the demand states that if price rises, quantity demanded does what✔✔ CORRECT ANSWER
Decreases
8. We would expect demand for cars to increase if...: The price of gasoline falls.
9. As income increases, consumers purchase more cars. Cars what type of good✔✔ CORRECT ANSWER
Normal goods
10. Supply curves show the relationship between price and quantity demand-ed. Assuming the law of supply
holds, supply curves are what✔✔ CORRECT ANSWER Upward sloping
11. Which causes a leftward shift in the supply curve for apples✔✔ CORRECT ANSWER An increase in the price of labor
12. An increase in the equilibrium price of coffee could be caused by: A decrease in supply of cottee.
13. What is Consumer surplus✔✔ CORRECT ANSWER The amount a buyer is willing to pay for a good less the amount the buyer actually pays.
14. When is a market is efficient✔✔ CORRECT ANSWER The sum of consumer and producer surplus is maximized.
15. What is Producer surplus✔✔ CORRECT ANSWER The ditterence between the price producers collect and the minimum price required to bring
goods to market.
16. Rent control is an example of what✔✔ CORRECT ANSWER A price ceiling
