ASU Econ 211 Final Exam/ Questions and
Answers /100% Correct Verified Answers/ Rated
A+
What does a production possibilities frontier display? - ANSWER Possible combinations of
output an economy can produce given available factors of production and technology.
What is a normative statement? - ANSWER Policymakers should increase the minimum wage to
improve standard of living.
The opportunity cost of helping a friend move is... - ANSWER the next best use of the time and
energy spent helping your friend.
An entity has a comparative advantage if it can produce what? - ANSWER At a lower
opportunity cost than another entity.
T/F: Suppose the United States has an absolute advantage in the production of oil and wheat.
This means that the U.S. would not gain from trading these goods. - ANSWER FALSE
The United States has a comparative advantage in the production of wheat and an absolute
advantage in the production of both apples and wheat relative to Canada. If the U.S. and
Canada specialize and trade, the U.S. should produce what? - ANSWER Wheat
The law of the demand states that if price rises, quantity demanded does what? - ANSWER
Decreases
We would expect demand for cars to increase if... - ANSWER The price of gasoline falls.
, As income increases, consumers purchase more cars. Cars what type of good? - ANSWER
Normal goods
Supply curves show the relationship between price and quantity demanded. Assuming the law
of supply holds, supply curves are what? - ANSWER Upward sloping
Which causes a leftward shift in the supply curve for apples? - ANSWER An increase in the price
of labor
An increase in the equilibrium price of coffee could be caused by - ANSWER A decrease in
supply of coffee.
What is Consumer surplus? - ANSWER The amount a buyer is willing to pay for a good less the
amount the buyer actually pays.
When is a market is efficient? - ANSWER The sum of consumer and producer surplus is
maximized.
What is Producer surplus? - ANSWER The difference between the price producers collect and
the minimum price required to bring goods to market.
Rent control is an example of what? - ANSWER A price ceiling
A price ceiling on a coffee would likely cause what? - ANSWER A shortage of coffee
What is minimum wage an example of? - ANSWER A price floor
In the labor market, suppliers of labor are - ANSWER Households
Answers /100% Correct Verified Answers/ Rated
A+
What does a production possibilities frontier display? - ANSWER Possible combinations of
output an economy can produce given available factors of production and technology.
What is a normative statement? - ANSWER Policymakers should increase the minimum wage to
improve standard of living.
The opportunity cost of helping a friend move is... - ANSWER the next best use of the time and
energy spent helping your friend.
An entity has a comparative advantage if it can produce what? - ANSWER At a lower
opportunity cost than another entity.
T/F: Suppose the United States has an absolute advantage in the production of oil and wheat.
This means that the U.S. would not gain from trading these goods. - ANSWER FALSE
The United States has a comparative advantage in the production of wheat and an absolute
advantage in the production of both apples and wheat relative to Canada. If the U.S. and
Canada specialize and trade, the U.S. should produce what? - ANSWER Wheat
The law of the demand states that if price rises, quantity demanded does what? - ANSWER
Decreases
We would expect demand for cars to increase if... - ANSWER The price of gasoline falls.
, As income increases, consumers purchase more cars. Cars what type of good? - ANSWER
Normal goods
Supply curves show the relationship between price and quantity demanded. Assuming the law
of supply holds, supply curves are what? - ANSWER Upward sloping
Which causes a leftward shift in the supply curve for apples? - ANSWER An increase in the price
of labor
An increase in the equilibrium price of coffee could be caused by - ANSWER A decrease in
supply of coffee.
What is Consumer surplus? - ANSWER The amount a buyer is willing to pay for a good less the
amount the buyer actually pays.
When is a market is efficient? - ANSWER The sum of consumer and producer surplus is
maximized.
What is Producer surplus? - ANSWER The difference between the price producers collect and
the minimum price required to bring goods to market.
Rent control is an example of what? - ANSWER A price ceiling
A price ceiling on a coffee would likely cause what? - ANSWER A shortage of coffee
What is minimum wage an example of? - ANSWER A price floor
In the labor market, suppliers of labor are - ANSWER Households
