ECO 201 EXAM 1 QUESTIONS
AND ANSWERS 100% PASS
The branch of economics that focuses on decision making for the economy as a whole is
called: - ✔✔macroeconomics
Human wants: - ✔✔are unlimited
Scarcity: - ✔✔is a problem that exists in every economy.
A tractor is an example of which of the following factors of production? - ✔✔capital.
Which of the following is a resource or factor of production? - ✔✔land, labor,
entrepreneurship and capital
Which of the following is the best example of a nonrenewable resource? - ✔✔crude oil
or natural gas.
Which of the following is the best example of a microeconomic topic? - ✔✔the analysis
of Ford Motors' competitiveness in the automobile industry.
An economic theory claims that a rise in gasoline prices will cause gasoline purchases to
fall, Ceteris paribus. The phrase "Ceteris paribus" means that: - ✔✔other relevant factors
like consumer incomes, population, etc. must be held constant.
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
,When economists use the term Ceteris paribus, they are indicating that: - ✔✔all other
variables except the ones specified for analysis are assumed to remain unchanged.
Which of the following represents a positive economics statement? - ✔✔a very higher
income tax rate will reduce the amount of time that people spend working. It will also
lead to a higher level of underground economy.
The statement, "Violent crime (statistics show) has decreased in the last five years," is: -
✔✔positive because it is testable
Statistics show that an increase in the federal minimum wage causes an increase in
unemployment among teenagers: - ✔✔is a positive economics statement
According to the law of demand, the quantity of a good demanded in a given time
period: - ✔✔Increases as its price falls, ceteris paribus.
Ceteris paribus, if the price of a digital camera rises, then we can expect:
HINT: a change (rise or fall) in the current price of "X" is the only variable that, when
changes, will not shift the demand curve or supply curve. The demand curve or the
supply curve will remain the same. Any variable, other than the current price of "X" will
shift the demand curve or supply cure, either to the right (increase) or left (decrease). -
✔✔A decrease in the quantity demanded of digital cameras (movement along the same
curve).
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
, Ceteris paribus, if the price of Swiss cheese falls, then we will see: - ✔✔An increase in
the quantity demanded of Swiss cheese (downward movement along the same demand
curve).
Ceteris paribus, which of the following is most likely to cause an increase in the
quantity demanded of candles? - ✔✔A decrease in the price of candles.
Ceteris paribus, if the price of basketballs rises, then we will see: - ✔✔A movement to
the left along the same demand curve for basketballs.
Which of the following would generally cause an increase in the demand for
automobiles (outward shift in the demand curve or a shift to the right in the demand
curve)?
HINT, once again!! for the remaining questions: any variable other than the current
price of "X" will shift the demand curve AND the supply curve either to the right
(increase) OR to the left (decrease). The demand curve or the supply curve will not
remain the same!! - ✔✔An increase in consumers' income.
If buyers expect the price of baseballs to fall in the future, then right now (currently)
there should be: - ✔✔A decrease in the demand for baseballs.
Assume Pepsi and Coke are substitutes. An increase in the price of one will result in: -
✔✔An increase in the demand for the other (the demand curve shifts to the right).
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 3
AND ANSWERS 100% PASS
The branch of economics that focuses on decision making for the economy as a whole is
called: - ✔✔macroeconomics
Human wants: - ✔✔are unlimited
Scarcity: - ✔✔is a problem that exists in every economy.
A tractor is an example of which of the following factors of production? - ✔✔capital.
Which of the following is a resource or factor of production? - ✔✔land, labor,
entrepreneurship and capital
Which of the following is the best example of a nonrenewable resource? - ✔✔crude oil
or natural gas.
Which of the following is the best example of a microeconomic topic? - ✔✔the analysis
of Ford Motors' competitiveness in the automobile industry.
An economic theory claims that a rise in gasoline prices will cause gasoline purchases to
fall, Ceteris paribus. The phrase "Ceteris paribus" means that: - ✔✔other relevant factors
like consumer incomes, population, etc. must be held constant.
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
,When economists use the term Ceteris paribus, they are indicating that: - ✔✔all other
variables except the ones specified for analysis are assumed to remain unchanged.
Which of the following represents a positive economics statement? - ✔✔a very higher
income tax rate will reduce the amount of time that people spend working. It will also
lead to a higher level of underground economy.
The statement, "Violent crime (statistics show) has decreased in the last five years," is: -
✔✔positive because it is testable
Statistics show that an increase in the federal minimum wage causes an increase in
unemployment among teenagers: - ✔✔is a positive economics statement
According to the law of demand, the quantity of a good demanded in a given time
period: - ✔✔Increases as its price falls, ceteris paribus.
Ceteris paribus, if the price of a digital camera rises, then we can expect:
HINT: a change (rise or fall) in the current price of "X" is the only variable that, when
changes, will not shift the demand curve or supply curve. The demand curve or the
supply curve will remain the same. Any variable, other than the current price of "X" will
shift the demand curve or supply cure, either to the right (increase) or left (decrease). -
✔✔A decrease in the quantity demanded of digital cameras (movement along the same
curve).
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
, Ceteris paribus, if the price of Swiss cheese falls, then we will see: - ✔✔An increase in
the quantity demanded of Swiss cheese (downward movement along the same demand
curve).
Ceteris paribus, which of the following is most likely to cause an increase in the
quantity demanded of candles? - ✔✔A decrease in the price of candles.
Ceteris paribus, if the price of basketballs rises, then we will see: - ✔✔A movement to
the left along the same demand curve for basketballs.
Which of the following would generally cause an increase in the demand for
automobiles (outward shift in the demand curve or a shift to the right in the demand
curve)?
HINT, once again!! for the remaining questions: any variable other than the current
price of "X" will shift the demand curve AND the supply curve either to the right
(increase) OR to the left (decrease). The demand curve or the supply curve will not
remain the same!! - ✔✔An increase in consumers' income.
If buyers expect the price of baseballs to fall in the future, then right now (currently)
there should be: - ✔✔A decrease in the demand for baseballs.
Assume Pepsi and Coke are substitutes. An increase in the price of one will result in: -
✔✔An increase in the demand for the other (the demand curve shifts to the right).
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 3
