ECON 1100 COMPLETE LATEST EXAM 1
UNT BASED QUESTIONS AND
ANSWERS
The primary difference between a change in supply and a change in the quantity supplied is: - ANSWER-a
change in quantity supplied is caused by a change in the price of the good itself, and a change in supply
is caused by a change in a non-price determinant of supply
Which of the following will cause a decrease in the demand for batteries? - ANSWER-An increase in the
price of digital cameras, a complement for batteries
Based on the information in the table below, the opportunity cost of producing one clock in Mexico is:
Clock Radio
Spain 4 hours 2 hours
Mexico 3 hours 6 hours - ANSWER-1/2 radio.
Which of the following is a normative microeconomic statement? - ANSWER-Government should lower
the taxes paid by small businesses.
An outward shift of a production possibilities frontier illustrates that: - ANSWER-economic growth has
occurred.
If the demand for electricity is inelastic but not perfectly inelastic, a 10% increase in the price of
electricity is likely to: - ANSWER-lead to a decrease in the quantity demanded of electricity of less than
10%.
If quantity demanded is 30 when price is $3 and quantity demanded is 20 when price is $5, then total
revenue __________ if price increases from $3 to $5, implying that demand is _________. - ANSWER-
increases; inelastic
In the market for used cars, a surplus of used cars would, ceteris paribus: - ANSWER-put downward
pressure on the price of used cars.
In the graph below, a shift from PPF1 to PPF2 will occur as a result of: - ANSWER-an increase in the
resources and technology used to produce food and clothing.
Initially, assume Country A is producing and consuming 10 cars and 20 boats, while Country B is
producing and consuming 20 cars and 40 boats. The two countries then decide to specialize according to
comparative advantage and engage in trade. The potential gains from trade for both countries combined
work out to be: - ANSWER-20 boats, to be divided between the two countries.
Which of the following is an example of capital as a factor of production? - ANSWER-Kitchen equipment
for a new restaurant venture
The demand for a life-saving drug is likely to be: - ANSWER-inelastic because the drug is a necessity.
When wants and needs exceed the resources available to satisfy them: - ANSWER-scarcity exists and
decisions must be made about how to allocate limited resources among competing uses
The ceteris paribus assumption is used to: - ANSWER-isolate the relationship between two variables by
holding other influences on the relationship constant
For a normal good, an increase in consumer income leads to: - ANSWER-an increase in demand and an
increase in both equilibrium price and quantity.
Which of the following pairs of goods is most likely to have a cross elasticity of demand coefficient of
1.2? - ANSWER-bagels and toast
Demand that is perfectly elastic graphs as a: - ANSWER-Horizontal line
Based on the information in the table below, Spain has a comparative advantage in the production of
_____ and should therefore specialize in the production of this item; Mexico has a comparative
UNT BASED QUESTIONS AND
ANSWERS
The primary difference between a change in supply and a change in the quantity supplied is: - ANSWER-a
change in quantity supplied is caused by a change in the price of the good itself, and a change in supply
is caused by a change in a non-price determinant of supply
Which of the following will cause a decrease in the demand for batteries? - ANSWER-An increase in the
price of digital cameras, a complement for batteries
Based on the information in the table below, the opportunity cost of producing one clock in Mexico is:
Clock Radio
Spain 4 hours 2 hours
Mexico 3 hours 6 hours - ANSWER-1/2 radio.
Which of the following is a normative microeconomic statement? - ANSWER-Government should lower
the taxes paid by small businesses.
An outward shift of a production possibilities frontier illustrates that: - ANSWER-economic growth has
occurred.
If the demand for electricity is inelastic but not perfectly inelastic, a 10% increase in the price of
electricity is likely to: - ANSWER-lead to a decrease in the quantity demanded of electricity of less than
10%.
If quantity demanded is 30 when price is $3 and quantity demanded is 20 when price is $5, then total
revenue __________ if price increases from $3 to $5, implying that demand is _________. - ANSWER-
increases; inelastic
In the market for used cars, a surplus of used cars would, ceteris paribus: - ANSWER-put downward
pressure on the price of used cars.
In the graph below, a shift from PPF1 to PPF2 will occur as a result of: - ANSWER-an increase in the
resources and technology used to produce food and clothing.
Initially, assume Country A is producing and consuming 10 cars and 20 boats, while Country B is
producing and consuming 20 cars and 40 boats. The two countries then decide to specialize according to
comparative advantage and engage in trade. The potential gains from trade for both countries combined
work out to be: - ANSWER-20 boats, to be divided between the two countries.
Which of the following is an example of capital as a factor of production? - ANSWER-Kitchen equipment
for a new restaurant venture
The demand for a life-saving drug is likely to be: - ANSWER-inelastic because the drug is a necessity.
When wants and needs exceed the resources available to satisfy them: - ANSWER-scarcity exists and
decisions must be made about how to allocate limited resources among competing uses
The ceteris paribus assumption is used to: - ANSWER-isolate the relationship between two variables by
holding other influences on the relationship constant
For a normal good, an increase in consumer income leads to: - ANSWER-an increase in demand and an
increase in both equilibrium price and quantity.
Which of the following pairs of goods is most likely to have a cross elasticity of demand coefficient of
1.2? - ANSWER-bagels and toast
Demand that is perfectly elastic graphs as a: - ANSWER-Horizontal line
Based on the information in the table below, Spain has a comparative advantage in the production of
_____ and should therefore specialize in the production of this item; Mexico has a comparative
