ECN 212 Final Exam Questions And All
Correct Answers 2026-2027 Updated.
a competitive market that is unregulated and has no externalities achieves the same result as a
benevolent social planner, free market allocation is pareto efficient (total surplus is maximized
in free market - Answer First Welfare Theorem
Ei < 0 - Answer inferior good
Ei>0 - Answer normal good
Ed=1 - Answer unit elastic
0<Ei<1 - Answer necessity good
Ed >0 - Answer inelastic
Ed <0 - Answer elastic
it is feasible and there is no way to make someone better off without making someone worse
off - Answer pareto efficient
legal maximum on the price at which a good can be sold - Answer price ceiling
price ceiling that is set below the equilibrium price is a ______ and creates a _________ -
Answer binding price ceiling, shortage (excess demand)
price floor that is set above the equilibrium price is a ________ and creates a _________ -
Answer binding price floor, surplus (excess supply)
legal minimum on the price at which a good can be sold at - Answer price floor
if there is a binding price ceiling or binding price floor then surplus ...... - Answer can't be
determined
if there is not a binding price ceiling or binding price floor then surplus - Answer is calculated
the same as the free market
, binding price ceiling + perfectly inefficient - Answer violates priniciple 1 and 3
binding price floor + perfectly inefficient - Answer violates principle 2 and 3
private benefit is the - Answer demand curve
social marginal benefit equals private marginal benefit when - Answer there are no
externalities
positive externality shifts the demand curve... - Answer up
total external benefit (surplus) from a positive externality is - Answer the area of the
parallelogram
private marginal cost is the - Answer supply curve
negative externality shifts the supply curve ... - Answer up
quantity where the social marginal cost is = to the private marginal cost - Answer efficient
quantity (where the new demand or new supply intersect), SMB=SMC
change in externality - dead weight loss = - Answer gain in surplus
import products if the world price is - Answer below equilibrium, horizontal difference
between supply and demand
export products if the world price is - Answer above equilibrium
what does imposing a tariff do - Answer shifts the world price up
tariffs benefit who - Answer producers
the dead weight on the right of the graph from a tariff is from - Answer consumers not buying
anymore
Correct Answers 2026-2027 Updated.
a competitive market that is unregulated and has no externalities achieves the same result as a
benevolent social planner, free market allocation is pareto efficient (total surplus is maximized
in free market - Answer First Welfare Theorem
Ei < 0 - Answer inferior good
Ei>0 - Answer normal good
Ed=1 - Answer unit elastic
0<Ei<1 - Answer necessity good
Ed >0 - Answer inelastic
Ed <0 - Answer elastic
it is feasible and there is no way to make someone better off without making someone worse
off - Answer pareto efficient
legal maximum on the price at which a good can be sold - Answer price ceiling
price ceiling that is set below the equilibrium price is a ______ and creates a _________ -
Answer binding price ceiling, shortage (excess demand)
price floor that is set above the equilibrium price is a ________ and creates a _________ -
Answer binding price floor, surplus (excess supply)
legal minimum on the price at which a good can be sold at - Answer price floor
if there is a binding price ceiling or binding price floor then surplus ...... - Answer can't be
determined
if there is not a binding price ceiling or binding price floor then surplus - Answer is calculated
the same as the free market
, binding price ceiling + perfectly inefficient - Answer violates priniciple 1 and 3
binding price floor + perfectly inefficient - Answer violates principle 2 and 3
private benefit is the - Answer demand curve
social marginal benefit equals private marginal benefit when - Answer there are no
externalities
positive externality shifts the demand curve... - Answer up
total external benefit (surplus) from a positive externality is - Answer the area of the
parallelogram
private marginal cost is the - Answer supply curve
negative externality shifts the supply curve ... - Answer up
quantity where the social marginal cost is = to the private marginal cost - Answer efficient
quantity (where the new demand or new supply intersect), SMB=SMC
change in externality - dead weight loss = - Answer gain in surplus
import products if the world price is - Answer below equilibrium, horizontal difference
between supply and demand
export products if the world price is - Answer above equilibrium
what does imposing a tariff do - Answer shifts the world price up
tariffs benefit who - Answer producers
the dead weight on the right of the graph from a tariff is from - Answer consumers not buying
anymore
