ECON 301 Exam 2025 Questions and
Answers
Price consumption curve - --CORRECT ANSWER--Curve that identifies the
optimal market basket associated with each possible price of a good, holding
constant all other determinants of demand
MRSxo= - --CORRECT ANSWER--Px/Po (o is other goods)
Income effect - --CORRECT ANSWER--a change in a consumer's real purchasing
power brought about by a change in the price of a good
Substitution effect - --CORRECT ANSWER--an incentive to increase
consumption of a good whose price falls, at the expense of other, now relatively
more expensive, goods
Substitution effect - --CORRECT ANSWER--change in consumption due to
change in relative prices, with no change in real income or well-being
Income effect - --CORRECT ANSWER--change in consumption due to a change
in real income or well-being, with no change in relative prices
Excise tax - --CORRECT ANSWER--tax on a specific good
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, Substitution effect> income effect - --CORRECT ANSWER--Demand curve
slopes downward
Income effect > substitution effect - --CORRECT ANSWER--Demand curve
slopes upward (Giffen Good)
Negatively sloped PC curve - --CORRECT ANSWER--elastic demand
Horizontal PC curve - --CORRECT ANSWER--unit elastic demand
Positively slope PD curve - --CORRECT ANSWER--inelastic demand
U-shaped PC curve - --CORRECT ANSWER--elastic demand at high prices and
inelastic demand at low prices
If average product of labor when 5 workers are employed is 10, and when 6
workers are employed is 12, then - --CORRECT ANSWER--the marginal product
curve lies above the average product curve between 5 and 6 workers
The law of diminishing marginal returns states that as the amount of an input
increases in equal increments, the resulting increments in output - --CORRECT
ANSWER--will eventually get smaller
A carpenter hammers nails each day at work. The average number of nails
hammered over the first three hours is 50, and the marginal product the fourth and
fifth hours of work is 40 and 20 nails, respectively. The total output after five
hours work is ____ nails - --CORRECT ANSWER--210
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
Answers
Price consumption curve - --CORRECT ANSWER--Curve that identifies the
optimal market basket associated with each possible price of a good, holding
constant all other determinants of demand
MRSxo= - --CORRECT ANSWER--Px/Po (o is other goods)
Income effect - --CORRECT ANSWER--a change in a consumer's real purchasing
power brought about by a change in the price of a good
Substitution effect - --CORRECT ANSWER--an incentive to increase
consumption of a good whose price falls, at the expense of other, now relatively
more expensive, goods
Substitution effect - --CORRECT ANSWER--change in consumption due to
change in relative prices, with no change in real income or well-being
Income effect - --CORRECT ANSWER--change in consumption due to a change
in real income or well-being, with no change in relative prices
Excise tax - --CORRECT ANSWER--tax on a specific good
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
, Substitution effect> income effect - --CORRECT ANSWER--Demand curve
slopes downward
Income effect > substitution effect - --CORRECT ANSWER--Demand curve
slopes upward (Giffen Good)
Negatively sloped PC curve - --CORRECT ANSWER--elastic demand
Horizontal PC curve - --CORRECT ANSWER--unit elastic demand
Positively slope PD curve - --CORRECT ANSWER--inelastic demand
U-shaped PC curve - --CORRECT ANSWER--elastic demand at high prices and
inelastic demand at low prices
If average product of labor when 5 workers are employed is 10, and when 6
workers are employed is 12, then - --CORRECT ANSWER--the marginal product
curve lies above the average product curve between 5 and 6 workers
The law of diminishing marginal returns states that as the amount of an input
increases in equal increments, the resulting increments in output - --CORRECT
ANSWER--will eventually get smaller
A carpenter hammers nails each day at work. The average number of nails
hammered over the first three hours is 50, and the marginal product the fourth and
fifth hours of work is 40 and 20 nails, respectively. The total output after five
hours work is ____ nails - --CORRECT ANSWER--210
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
