LSU ECON 2030 Final Questions And
Answers
Suppose bthat bmac band bcheese bis ban binferior bgood band bnational bincome bis
bdecreasing, bEverything belse bheld bconstant, bthe bequilibrium bprice bof bmac band
bcheese bwill b_____ band bthe bequilibrium bquantity btransacted bwill b_____.
a) bDecrease; bdecrease
b) bDecrease; bincrease
c) bIncrease; bambiguous b
d) bIncrease; bdecrease
e) bIncrease; bincrease b- bcorrect banswers✔✔e) bIncrease; bincrease
Suppose bthe bprice bof bpumpkin bincrease. bEverything belse bheld bconstant, bthis bwill
bcause b_____ bin bthe bdemand bfor bpumpkins.
a) bA bdecrease
b) bAn bincrease
c) bNo bchange b- bcorrect banswers✔✔c) bNo bchange
Change bin bprice bis bmovement balong bthe bcurve, bso bquantity bdemanded bgoes bdown
bbut bdemand bstays bthe bsame.
Suppose ba bcustomer boffered bTony, ba brational bpainter, b$500 bfor bhis bpainting
b'Banana bHead' band bhe bsold bit. bIt bcan bbe bconcluded bwith bcertainty bthat bTony's
breservation bprice bfor bhis bpainting bwas b_____ b$500.
a) bLess bthan
b) bGreater bthan
c) bEqual bto
d) bGreater bthan bor bequal bto
e) bLess bthan bor bequal bto b- bcorrect banswers✔✔e) bLess bthan bor bequal bto
Suppose bthat bworker bproductivity b_____ bin bthe bbubble bbath bindustry. bEverything
belse bheld bconstant, bthe bequilibrium bprice bof bbubble bbath bliquid bwill b_____ band
bthe bequilibrium bquantity btransacted bwill bdecrease.
,a) bincreases; bincrease
b) bIncreases; bdecrease
c) bDecreases; bincrease
d) bDecreases; bdecrease b- bcorrect banswers✔✔c) bDecreases; bincrease
Which bof bthe bfollowing bconcepts bis bdepicted bby bthe bnumerical bslope bof bthe
bproduction bpossibilities bfrontier b(PPF) bat ba bparticular bpoint bon bthe bPPF?
a) bThe bopportunity bcost bof bthe bgood bmeasured bon bthe bhorizontal baxis.
b) bThe bdegree bof battainability bof bthe bcombination bof bgoods.
c) bThe brate bof beconomic bgrowth bin bthe bcountry.
d) bThe bdegree bof befficiency bof bthe bcombination bof bgoods. b- bcorrect banswers✔✔a)
bThe bopportunity bcost bof bthe bgood bmeasured bon bthe bhorizontal baxis.
Canada: b25 bcoal/hr, b100 bpotatoes/hr
Wales: b20 bcoal/hr, b60 bpotatoes/hr
In bthe bsituation babove, bthe bmove bfrom btrade bto bautarky bwill bbenefit bcoal
bconsumers bin bwhich bcountry?
a) bNeither bCanada bnor bWales.
b) bBoth bCanada band bWales
c) bOnly bCanada.
d) bOnly bWales. b- bcorrect banswers✔✔d) bOnly bWales.
Canada: b25 bcoal/hr, b100 bpotatoes/hr
Wales: b20 bcoal/hr, b60 bpotatoes/hr
In bthe bsituation babove, bthe bmove bfrom btrade bto bautarky bwill bcause bemployment bof
bCanadian bfarmers bto
a) bRemain bunchanged.
b) bIncrease
c) bDecrease b- bcorrect banswers✔✔c) bDecrease
Suppose ba bstore bsells bpairs bof bshoes bfor b$30 beach band bis brunning ba b"buy bone,
band bget bone b%50 boff" bsale. bSuppose bfurther bthat byou bbuy bfour bpairs bof bshoes.
bThe bmarginal bcost bof bthe bthird bpair bof bshoes bpurchased bis
a) b$15
b) b$30
c) b$45
d) b$75
e) b$90 b- bcorrect banswers✔✔b) b$30
The bprice bof bgoods bthat bare bsubstitutes bin bconsumption bmove
, a) bOpposite bof bone banother
b) bTogether b- bcorrect banswers✔✔b) bTogether
Suppose bthat bapples bare bthe bmain binput bin bthe bproduction bof bapple bcider.
bSuppose bfurther bthat bthe bwage bpaid bto bapple bharvesters bdecreases.
In bthe bsituation babove, bthe bequilibrium bprice bof bapple bcider bwill b_____ band bthe
bequilibrium bquantity bof bapple bcider btransacted bwill b_____, beverything belse bheld
bconstant.
a) bDecrease; bincrease
b) bDecrease; bdecrease
c) bIncrease; bincrease
d) bIncrease; bdecrease b- bcorrect banswers✔✔a) bDecrease; bincrease
Suppose bthat bapples bare bthe bmain binput bin bthe bproduction bof bapple bcider.
bSuppose bfurther bthat bthe bwage bpaid bto bapple bharvesters bdecreases.
In bthe bsituation babove, bthe bwage bchange bwill bcause bthe b_____ bapples bto b_____.
a) bDemand bfor; bdecrease
b) bSupply bof; bincrease
c) bDemand bfor; bincrease
d) bSupply bof; bdecrease b- bcorrect banswers✔✔b) bSupply bof; bincrease
Mark: b16 bcookies/hr, b4 bbrownies/hr
Howie: b14 bcookies/hr, b2 bbrownies/hr
In bthe bsituation babove, b____ bhas bthe babsolute badvantage bin bbaking bcookies band
b_____ bhas bthe bcomparative badvantage bin bbaking bbrownies.
a) bHowie; bMark
b) bMark; bHowie
c) bHowie; bHowie
d) bMark; bMark b- bcorrect banswers✔✔d) bMark; bMark
Mark: b16 bcookies/hr, b4 bbrownies/hr
Howie: b14 bcookies/hr, b2 bbrownies/hr
In bthe bsituation babove, bHowie's bopportunity bcost bof bbaking bone bcookie bis b_____
bbrownies.
a) b1/7
b) b7/8
c) b8/7
Answers
Suppose bthat bmac band bcheese bis ban binferior bgood band bnational bincome bis
bdecreasing, bEverything belse bheld bconstant, bthe bequilibrium bprice bof bmac band
bcheese bwill b_____ band bthe bequilibrium bquantity btransacted bwill b_____.
a) bDecrease; bdecrease
b) bDecrease; bincrease
c) bIncrease; bambiguous b
d) bIncrease; bdecrease
e) bIncrease; bincrease b- bcorrect banswers✔✔e) bIncrease; bincrease
Suppose bthe bprice bof bpumpkin bincrease. bEverything belse bheld bconstant, bthis bwill
bcause b_____ bin bthe bdemand bfor bpumpkins.
a) bA bdecrease
b) bAn bincrease
c) bNo bchange b- bcorrect banswers✔✔c) bNo bchange
Change bin bprice bis bmovement balong bthe bcurve, bso bquantity bdemanded bgoes bdown
bbut bdemand bstays bthe bsame.
Suppose ba bcustomer boffered bTony, ba brational bpainter, b$500 bfor bhis bpainting
b'Banana bHead' band bhe bsold bit. bIt bcan bbe bconcluded bwith bcertainty bthat bTony's
breservation bprice bfor bhis bpainting bwas b_____ b$500.
a) bLess bthan
b) bGreater bthan
c) bEqual bto
d) bGreater bthan bor bequal bto
e) bLess bthan bor bequal bto b- bcorrect banswers✔✔e) bLess bthan bor bequal bto
Suppose bthat bworker bproductivity b_____ bin bthe bbubble bbath bindustry. bEverything
belse bheld bconstant, bthe bequilibrium bprice bof bbubble bbath bliquid bwill b_____ band
bthe bequilibrium bquantity btransacted bwill bdecrease.
,a) bincreases; bincrease
b) bIncreases; bdecrease
c) bDecreases; bincrease
d) bDecreases; bdecrease b- bcorrect banswers✔✔c) bDecreases; bincrease
Which bof bthe bfollowing bconcepts bis bdepicted bby bthe bnumerical bslope bof bthe
bproduction bpossibilities bfrontier b(PPF) bat ba bparticular bpoint bon bthe bPPF?
a) bThe bopportunity bcost bof bthe bgood bmeasured bon bthe bhorizontal baxis.
b) bThe bdegree bof battainability bof bthe bcombination bof bgoods.
c) bThe brate bof beconomic bgrowth bin bthe bcountry.
d) bThe bdegree bof befficiency bof bthe bcombination bof bgoods. b- bcorrect banswers✔✔a)
bThe bopportunity bcost bof bthe bgood bmeasured bon bthe bhorizontal baxis.
Canada: b25 bcoal/hr, b100 bpotatoes/hr
Wales: b20 bcoal/hr, b60 bpotatoes/hr
In bthe bsituation babove, bthe bmove bfrom btrade bto bautarky bwill bbenefit bcoal
bconsumers bin bwhich bcountry?
a) bNeither bCanada bnor bWales.
b) bBoth bCanada band bWales
c) bOnly bCanada.
d) bOnly bWales. b- bcorrect banswers✔✔d) bOnly bWales.
Canada: b25 bcoal/hr, b100 bpotatoes/hr
Wales: b20 bcoal/hr, b60 bpotatoes/hr
In bthe bsituation babove, bthe bmove bfrom btrade bto bautarky bwill bcause bemployment bof
bCanadian bfarmers bto
a) bRemain bunchanged.
b) bIncrease
c) bDecrease b- bcorrect banswers✔✔c) bDecrease
Suppose ba bstore bsells bpairs bof bshoes bfor b$30 beach band bis brunning ba b"buy bone,
band bget bone b%50 boff" bsale. bSuppose bfurther bthat byou bbuy bfour bpairs bof bshoes.
bThe bmarginal bcost bof bthe bthird bpair bof bshoes bpurchased bis
a) b$15
b) b$30
c) b$45
d) b$75
e) b$90 b- bcorrect banswers✔✔b) b$30
The bprice bof bgoods bthat bare bsubstitutes bin bconsumption bmove
, a) bOpposite bof bone banother
b) bTogether b- bcorrect banswers✔✔b) bTogether
Suppose bthat bapples bare bthe bmain binput bin bthe bproduction bof bapple bcider.
bSuppose bfurther bthat bthe bwage bpaid bto bapple bharvesters bdecreases.
In bthe bsituation babove, bthe bequilibrium bprice bof bapple bcider bwill b_____ band bthe
bequilibrium bquantity bof bapple bcider btransacted bwill b_____, beverything belse bheld
bconstant.
a) bDecrease; bincrease
b) bDecrease; bdecrease
c) bIncrease; bincrease
d) bIncrease; bdecrease b- bcorrect banswers✔✔a) bDecrease; bincrease
Suppose bthat bapples bare bthe bmain binput bin bthe bproduction bof bapple bcider.
bSuppose bfurther bthat bthe bwage bpaid bto bapple bharvesters bdecreases.
In bthe bsituation babove, bthe bwage bchange bwill bcause bthe b_____ bapples bto b_____.
a) bDemand bfor; bdecrease
b) bSupply bof; bincrease
c) bDemand bfor; bincrease
d) bSupply bof; bdecrease b- bcorrect banswers✔✔b) bSupply bof; bincrease
Mark: b16 bcookies/hr, b4 bbrownies/hr
Howie: b14 bcookies/hr, b2 bbrownies/hr
In bthe bsituation babove, b____ bhas bthe babsolute badvantage bin bbaking bcookies band
b_____ bhas bthe bcomparative badvantage bin bbaking bbrownies.
a) bHowie; bMark
b) bMark; bHowie
c) bHowie; bHowie
d) bMark; bMark b- bcorrect banswers✔✔d) bMark; bMark
Mark: b16 bcookies/hr, b4 bbrownies/hr
Howie: b14 bcookies/hr, b2 bbrownies/hr
In bthe bsituation babove, bHowie's bopportunity bcost bof bbaking bone bcookie bis b_____
bbrownies.
a) b1/7
b) b7/8
c) b8/7
