ECON 2110 Final Exam Clemson Questions And Answers

ECON 2110 Final Exam Clemson
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ECON 2110 Final Exam Clemson Questions
And Answers
1. The price of peanuts (an input) falls while the price of jelly (a complement) ri
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ses. What will happen to equilibrium price and quantity of peanut butter?
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a. Equilibrium price and quantity will increase. q q q q q


b. Equilibrium price will increase but the effect on equilibrium quantity is u
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ncertain.
c. Equilibrium quantity will decrease but the effect on equilibrium price is u
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ncertain.
d. Equilibrium price will decrease but the effect on equilibrium quantity is u
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ncertain.
e. Equilibrium quantity will increase but the effect on equilibrium price is unce
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rtai: d. Equilibrium price will decrease but the effect on equilibrium quantity is uncertai
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n.
2. New safety regulations raise the cost of producing peanut butter just as an al
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mond butter craze sweeps the nation. What will happen to equilibrium price an
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d quantity of peanut butter?
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a. Equilibrium price and quantity will increase. q q q q q


b. Equilibrium price will increase but the effect on equilibrium quantity is u
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ncertain.
c. Equilibrium quantity will decrease but the effect on equilibrium price is u
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ncertain
d. Equilibrium price will decrease but the effect on equilibrium quantity is u
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ncertain.
e. Equilibrium quantity will increase but the effect on equilibrium price is unce
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rtain.: c. Equilibrium quantity will decrease but the effect on equilibrium price is uncer
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tain
3. American incomes rise (assume peanut butter is a normal good) while the pr
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ice of bread (a complement) falls. What will happen to equilibrium price and qua
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ntity of peanut butter?
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a. Equilibrium price and quantity will increase. q q q q q


b. Equilibrium price will increase but the effect on equilibrium quantity is u
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ncertain.
c. Equilibrium quantity will decrease but the effect on equilibrium price is u
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, ECON 2110 Final Exam Clemson
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Studyqonlineqatqhttps://quizlet.com/_ci1be6
ncertain.
d. Equilibrium price will decrease but the effect on equilibrium quantity is u
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ncertain.
e. Equilibrium quantity will increase but the effect on equilibrium price is u
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ncertain.: a. Equilibrium price and quantity will increase.
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4. Elections are underway, and Congressman Bob has promised that if he is
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elected, college will be tuition-free for everybody. Assuming nothing else
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, ECON 2110 Final Exam Clemson q q q q


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changes, if put into effect, this policy would q q q q q q q


a. increase the demand for college education. q q q q q


b. increase the number of people attending college. q q q q q q


c. Both a and b. q q q


d. Neither a nor b.: b. increase the number of people attending college.
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5. Congressman Bob claims that because his plan will be paid for by a special ta q q q q q q q q q q q q q q


x on billionaires, it will cost the rest of us (the non-
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billionaires) nothing. What would an economist say? q q q q q q


a. If billionaires kept the money, they might do something productive with it
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(being productive was probably how they became billionaires in the first pla
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ce).
b. The money from the tax on billionaires could be used to fund something el
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se.
c. Both a and b. q q q


d. Neither a nor b.; the congressman is correct.: c. Both a and b. q q q q q q q q q q q q


6. Congressman Bob claims that because his plan will be paid for by a special ta q q q q q q q q q q q q q q


x on billionaires, it will cost the rest of us (the non-billionaires) nothing.
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Congressman Bob's plan will be least expensive if q q q q q q q


a. the demand for college is elastic.
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b. the demand for college is inelastic.
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c. the demand for college is less than the supply.
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d. college education is an inferior good.: b. the demand for college is inelastic.
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7. Which of the following would explain why the supply of cadium is less el
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astic than the supply of laudanum?
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a. There are closer substitutes for laudanum than for cadium.
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b. The equilibrium quantity of laudanum is higher than the equilibrium quantity o
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f cadium. q


c. Opportunity cost rises more quickly along the cadium supply curve than a q q q q q q q q q q q


long the laudanum supply curve.q q q q


d. The supply of cadium is greater than the supply of laudanum.: c. Opportunity c
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ost rises more quickly along the cadium supply curve than along the laudanum suppl
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y curve. q


8. Using the supply-and- q q


demand model, if I observe that the price of milk has fallen, I can conclude that
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a. the demand for milk has fallen. q q q q q


b. the supply of milk has risen. q q q q q


c. the demand for milk is elastic. q q q q q


d. Any one of the above. q q q q


e. Either a or b only.: e. Either a or b only. q q q q q q q q q q




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