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ECON 2100 Exam 1 Practice Questions and
Correct Answers
What is a correct statement about production possibilities
frontiers?— Ans: An economy can produce at any point on or
inside the production possibilities frontier, but
not outside the frontier.
If an economy is producing efficiently, then— Ans: there is no way
to produce more of one good without producing less of another
good.
Normative statements are not— Ans: descriptive
Kelly and David are both capable of repairing cars and cooking
meals what is not possible?— Ans: Kelly has a comparative
advantage in repairing cars and in cooking meals.
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, 2 | Page
Suppose that a worker in Cornland can grow either 40 bushels of
corn or 10 bushels of oats per year, and a worker in Oatland can
grow either 5 bushels of corn or 50 bushels of oats per year. There
are 20 workers in Cornland and 20 workers in Oatland. If the two
countries do not trade, Cornland will produce and consume 400
bushels of corn and 100 bushels of oats, while Oatland will
produce and consume 60 bushels of corn and 400 bushels of oats.
If each country made the decision to specialize in producing the
good in which it has a comparative advantage, then the combined
yearly output of the two countries would increase by— Ans: 340
bushels of corn and 500 bushels of oats
In a market economy, supply and demand are important because
they— Ans: a. play a critical role in the allocation of the economy's
scarce resources. b. determine how much of each good gets
produced. c. can be used to predict the impact on the economy of
various events and policies. d. (All of the above are correct.)
© 2025 All rights reserved
ECON 2100 Exam 1 Practice Questions and
Correct Answers
What is a correct statement about production possibilities
frontiers?— Ans: An economy can produce at any point on or
inside the production possibilities frontier, but
not outside the frontier.
If an economy is producing efficiently, then— Ans: there is no way
to produce more of one good without producing less of another
good.
Normative statements are not— Ans: descriptive
Kelly and David are both capable of repairing cars and cooking
meals what is not possible?— Ans: Kelly has a comparative
advantage in repairing cars and in cooking meals.
© 2025 All rights reserved
, 2 | Page
Suppose that a worker in Cornland can grow either 40 bushels of
corn or 10 bushels of oats per year, and a worker in Oatland can
grow either 5 bushels of corn or 50 bushels of oats per year. There
are 20 workers in Cornland and 20 workers in Oatland. If the two
countries do not trade, Cornland will produce and consume 400
bushels of corn and 100 bushels of oats, while Oatland will
produce and consume 60 bushels of corn and 400 bushels of oats.
If each country made the decision to specialize in producing the
good in which it has a comparative advantage, then the combined
yearly output of the two countries would increase by— Ans: 340
bushels of corn and 500 bushels of oats
In a market economy, supply and demand are important because
they— Ans: a. play a critical role in the allocation of the economy's
scarce resources. b. determine how much of each good gets
produced. c. can be used to predict the impact on the economy of
various events and policies. d. (All of the above are correct.)
© 2025 All rights reserved
