EC 202 FINAL EXAM QUESTIONS & ANSWERS
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
(table on question 8). The table gives the total benefit that Ron gets from making tables.
What is the marginal benefit he gets from the 3rd table he makes? - Answer -$2
Andrea can produce either 10 shakes or 10 burgers. Brian can produce either 3 shakes
or 1 burger. Who has the comparative advantage and over what product? - Answer -
Brian has a comparative advantage at making shakes
If Spartania is an autarchy (no international trade), the price of corn is $3. The
equilibrium world price of corn is $5. Spartania has decided to allow the international
trade of corn. What will Spartania do? - Answer -Spartania will export corn
What accurately describes the slope of a supply curve? - Answer -Supply always
slopes up
How would we expect a federal subsidy on milk to affect the supply of milk? - Answer -
Outward shift of the supply curve
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
(table on question 8). The table gives the total benefit that Ron gets from making tables.
What is the marginal benefit he gets from the 3rd table he makes? - Answer -$2
Andrea can produce either 10 shakes or 10 burgers. Brian can produce either 3 shakes
or 1 burger. Who has the comparative advantage and over what product? - Answer -
Brian has a comparative advantage at making shakes
If Spartania is an autarchy (no international trade), the price of corn is $3. The
equilibrium world price of corn is $5. Spartania has decided to allow the international
trade of corn. What will Spartania do? - Answer -Spartania will export corn
What accurately describes the slope of a supply curve? - Answer -Supply always
slopes up
How would we expect a federal subsidy on milk to affect the supply of milk? - Answer -
Outward shift of the supply curve
