EC 202 Final Exam
What is the best way of stating the law of demand? - Answer-As price increases, quantity demanded
increases
If Julio's income goes down, what do we expect to happen to his demand for restaurant meals? -
Answer-Demand shifts left
As a result if increased gov't regulations, the price of beer increases. What do we expect to Eric's
demand for beer? - Answer-A decrease in quantity demanded (movement left along the demand curve)
The market for salmon is in equilibrium with a price of $10 and a quantity of 5,000. A study finds that
salmon can make you live longer. As a result we expect equilibrium price to ___________ and
equilibrium quantity to __________: - Answer-Increase; Increase
Peanut butter and jelly are compliments. The price of jelly increases. What happens to the price and
quantity of peanut butter? - Answer-Price and quantity of peanut butter decrease
Jake wants to know how many tacos to eat. He gets diminishing marginal benefits from tacos. They cost
$2 each. When should Jake stop eating tacos? - Answer-Jake should continue to eat tacos until the
marginal benefit of the last taco eaten is $2
(graph on question 7). The graph gives the production possibilities frontier for a baker. Which point
represents a point that is attainable and not efficient? - Answer-D
What is the best way of stating the law of demand? - Answer-As price increases, quantity demanded
increases
If Julio's income goes down, what do we expect to happen to his demand for restaurant meals? -
Answer-Demand shifts left
As a result if increased gov't regulations, the price of beer increases. What do we expect to Eric's
demand for beer? - Answer-A decrease in quantity demanded (movement left along the demand curve)
The market for salmon is in equilibrium with a price of $10 and a quantity of 5,000. A study finds that
salmon can make you live longer. As a result we expect equilibrium price to ___________ and
equilibrium quantity to __________: - Answer-Increase; Increase
Peanut butter and jelly are compliments. The price of jelly increases. What happens to the price and
quantity of peanut butter? - Answer-Price and quantity of peanut butter decrease
Jake wants to know how many tacos to eat. He gets diminishing marginal benefits from tacos. They cost
$2 each. When should Jake stop eating tacos? - Answer-Jake should continue to eat tacos until the
marginal benefit of the last taco eaten is $2
(graph on question 7). The graph gives the production possibilities frontier for a baker. Which point
represents a point that is attainable and not efficient? - Answer-D
