ASU ECON 211 FINAL EXAM WITH ACTUAL
QUESTIONS AND VERIFIED ANSWERS COVERING
PRINCIPLES OF MACROECONOMICS, MONETARY
SYSTEMS, FISCALS POLICY AND ECONOMIC
INDICATORS.
What does a production possibilities frontier display? - CORRECT ANSWERS-Possible
combinations of output an economy can produce given available factors of production
and technology.
What is a normative statement? - CORRECT ANSWERS-Policymakers should increase
the minimum wage to improve standard of living.
The opportunity cost of helping a friend move is... - CORRECT ANSWERS-the next
best use of the time and energy spent helping your friend.
An entity has a comparative advantage if it can produce what? - CORRECT
ANSWERS-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. - CORRECT
ANSWERS-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? - CORRECT
ANSWERS-Wheat
The law of the demand states that if price rises, quantity demanded does what? -
CORRECT ANSWERS-Decreases
We would expect demand for cars to increase if... - CORRECT ANSWERS-The price of
gasoline falls.
As income increases, consumers purchase more cars. Cars what type of good? -
CORRECT ANSWERS-Normal goods
, Supply curves show the relationship between price and quantity demanded. Assuming
the law of supply holds, supply curves are what? - CORRECT ANSWERS-Upward
sloping
Which causes a leftward shift in the supply curve for apples? - CORRECT ANSWERS-
An increase in the price of labor
An increase in the equilibrium price of coffee could be caused by - CORRECT
ANSWERS-A decrease in supply of coffee.
What is Consumer surplus? - CORRECT ANSWERS-The amount a buyer is willing to
pay for a good less the amount the buyer actually pays.
When is a market is efficient? - CORRECT ANSWERS-The sum of consumer and
producer surplus is maximized.
What is Producer surplus? - CORRECT ANSWERS-The difference between the price
producers collect and the minimum price required to bring goods to market.
Rent control is an example of what? - CORRECT ANSWERS-A price ceiling
A price ceiling on a coffee would likely cause what? - CORRECT ANSWERS-A
shortage of coffee
What is minimum wage an example of? - CORRECT ANSWERS-A price floor
In the labor market, suppliers of labor are - CORRECT ANSWERS-Households
T/F: A payroll tax on a firm will raise more revenue than an income tax of the same
amount on households. - CORRECT ANSWERS-FALSE
T/F: If the government decides to impose a $1 tax on coffee, it makes no difference if
the government collect the tax from producers or consumers. - CORRECT ANSWERS-
TRUE
T/F: The revenue collected by the government from a tax is not considered part of total
surplus. - CORRECT ANSWERS-FALSE
T/F: If supply and demand are relatively inelastic, deadweight loss greater than
otherwise. - CORRECT ANSWERS-FALSE
T/F: If tax rates are high enough, the government can increase revenue by lowering the
tax rate. - CORRECT ANSWERS-TRUE
QUESTIONS AND VERIFIED ANSWERS COVERING
PRINCIPLES OF MACROECONOMICS, MONETARY
SYSTEMS, FISCALS POLICY AND ECONOMIC
INDICATORS.
What does a production possibilities frontier display? - CORRECT ANSWERS-Possible
combinations of output an economy can produce given available factors of production
and technology.
What is a normative statement? - CORRECT ANSWERS-Policymakers should increase
the minimum wage to improve standard of living.
The opportunity cost of helping a friend move is... - CORRECT ANSWERS-the next
best use of the time and energy spent helping your friend.
An entity has a comparative advantage if it can produce what? - CORRECT
ANSWERS-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. - CORRECT
ANSWERS-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? - CORRECT
ANSWERS-Wheat
The law of the demand states that if price rises, quantity demanded does what? -
CORRECT ANSWERS-Decreases
We would expect demand for cars to increase if... - CORRECT ANSWERS-The price of
gasoline falls.
As income increases, consumers purchase more cars. Cars what type of good? -
CORRECT ANSWERS-Normal goods
, Supply curves show the relationship between price and quantity demanded. Assuming
the law of supply holds, supply curves are what? - CORRECT ANSWERS-Upward
sloping
Which causes a leftward shift in the supply curve for apples? - CORRECT ANSWERS-
An increase in the price of labor
An increase in the equilibrium price of coffee could be caused by - CORRECT
ANSWERS-A decrease in supply of coffee.
What is Consumer surplus? - CORRECT ANSWERS-The amount a buyer is willing to
pay for a good less the amount the buyer actually pays.
When is a market is efficient? - CORRECT ANSWERS-The sum of consumer and
producer surplus is maximized.
What is Producer surplus? - CORRECT ANSWERS-The difference between the price
producers collect and the minimum price required to bring goods to market.
Rent control is an example of what? - CORRECT ANSWERS-A price ceiling
A price ceiling on a coffee would likely cause what? - CORRECT ANSWERS-A
shortage of coffee
What is minimum wage an example of? - CORRECT ANSWERS-A price floor
In the labor market, suppliers of labor are - CORRECT ANSWERS-Households
T/F: A payroll tax on a firm will raise more revenue than an income tax of the same
amount on households. - CORRECT ANSWERS-FALSE
T/F: If the government decides to impose a $1 tax on coffee, it makes no difference if
the government collect the tax from producers or consumers. - CORRECT ANSWERS-
TRUE
T/F: The revenue collected by the government from a tax is not considered part of total
surplus. - CORRECT ANSWERS-FALSE
T/F: If supply and demand are relatively inelastic, deadweight loss greater than
otherwise. - CORRECT ANSWERS-FALSE
T/F: If tax rates are high enough, the government can increase revenue by lowering the
tax rate. - CORRECT ANSWERS-TRUE
