ECO 201- EXAM 1 QUESTIONS
AND ANSWERS 100% PASS
A market includes both buyers and sellers. - ✔✔TRUE
Pizza (my cat) has a toy box where he held hostage several stuffed rats (R) and stuffed
birds (B). The following equation represents his production possibility frontier: R = 100
- 4B. For Pizza, the opportunity cost of tearing apart 1 stuffed bird is 1/4 rabbits. -
✔✔FALSE
Consumers demanded googly eyes. The economy provided for that need. This
represents an example of a Command economy. - ✔✔FALSE
The production possibilities frontier illustrates constant opportunity cost at all levels of
output - ✔✔TRUE IF LINEAR, FALSE IF CURVED
In this market for watermelons, a severe drought occurs which affects the watermelon
crop. The equilibrium price will decrease. - ✔✔FALSE
Assumptions can simplify the complex world and make it easier to understand. -
✔✔TRUE
The invisible hand represents the price system. - ✔✔TRUE
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
, Consider the statement, "The trade restrictions between the U.S. and the countries of the
European Union are unfair." This is an example of a positive economic statement -
✔✔FALSE
A tariff imposed on an imported product will typically decrease the amount of the
imported product that is purchased in the country that imposed the tariff. - ✔✔TRUE
The ceteris paribus assumption means that all other relevant factors remain unchanged.
- ✔✔TRUE
The overriding reason why households and societies face many decisions is that
A-resources are scarce
B-goods and services are not scarce
C-incomes fluctuate with business cycles
D-people, by nature, tend to disagree - ✔✔A
Which of the following is true?
A-Efficiency refers to the size of the economic pie; equality refers to how the pie is
divided.
B-Government policies usually improve upon both equality and efficiency.
C-As long as the economic pie continually gets larger, no one will have to go hungry.
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
AND ANSWERS 100% PASS
A market includes both buyers and sellers. - ✔✔TRUE
Pizza (my cat) has a toy box where he held hostage several stuffed rats (R) and stuffed
birds (B). The following equation represents his production possibility frontier: R = 100
- 4B. For Pizza, the opportunity cost of tearing apart 1 stuffed bird is 1/4 rabbits. -
✔✔FALSE
Consumers demanded googly eyes. The economy provided for that need. This
represents an example of a Command economy. - ✔✔FALSE
The production possibilities frontier illustrates constant opportunity cost at all levels of
output - ✔✔TRUE IF LINEAR, FALSE IF CURVED
In this market for watermelons, a severe drought occurs which affects the watermelon
crop. The equilibrium price will decrease. - ✔✔FALSE
Assumptions can simplify the complex world and make it easier to understand. -
✔✔TRUE
The invisible hand represents the price system. - ✔✔TRUE
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
, Consider the statement, "The trade restrictions between the U.S. and the countries of the
European Union are unfair." This is an example of a positive economic statement -
✔✔FALSE
A tariff imposed on an imported product will typically decrease the amount of the
imported product that is purchased in the country that imposed the tariff. - ✔✔TRUE
The ceteris paribus assumption means that all other relevant factors remain unchanged.
- ✔✔TRUE
The overriding reason why households and societies face many decisions is that
A-resources are scarce
B-goods and services are not scarce
C-incomes fluctuate with business cycles
D-people, by nature, tend to disagree - ✔✔A
Which of the following is true?
A-Efficiency refers to the size of the economic pie; equality refers to how the pie is
divided.
B-Government policies usually improve upon both equality and efficiency.
C-As long as the economic pie continually gets larger, no one will have to go hungry.
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
