ASU Econ 211 Final Exam /
Questions with 100% correct
Answers.
Qs: What does a production possibilities frontier display? -
Answer:
Possible combinations of output an economy can produce given available
factors of production and technology.
Qs: What is a normative statement? -
Answer:
Policymakers should increase the minimum wage to improve standard of
living.
Qs: The opportunity cost of helping a friend move is... -
Answer:
the next best use of the time and energy spent helping your friend.
Qs: An entity has a comparative advantage if it can produce what? -
Answer:
At a lower opportunity cost than another entity.
Qs: 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
1 | Page
,Qs: 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
Qs: The law of the demand states that if price rises, quantity demanded does
what? -
Answer:
Decreases
Qs: We would expect demand for cars to increase if... -
Answer:
The price of gasoline falls.
Qs: As income increases, consumers purchase more cars. Cars what type of
good? -
Answer:
Normal goods
Qs: Supply curves show the relationship between price and quantity
demanded. Assuming the law of supply holds, supply curves are what? -
Answer:
Upward sloping
Qs: Which causes a leftward shift in the supply curve for apples? -
Answer:
2 | Page
, An increase in the price of labor
Qs: An increase in the equilibrium price of coffee could be caused by -
Answer:
A decrease in supply of coffee.
Qs: What is Consumer surplus? -
Answer:
The amount a buyer is willing to pay for a good less the amount the buyer
actually pays.
Qs: When is a market is efficient? -
Answer:
The sum of consumer and producer surplus is maximized.
Qs: What is Producer surplus? -
Answer:
The difference between the price producers collect and the minimum price
required to bring goods to market.
Qs: Rent control is an example of what? -
Answer:
A price ceiling
Qs: A price ceiling on a coffee would likely cause what? -
Answer:
A shortage of coffee
3 | Page
Questions with 100% correct
Answers.
Qs: What does a production possibilities frontier display? -
Answer:
Possible combinations of output an economy can produce given available
factors of production and technology.
Qs: What is a normative statement? -
Answer:
Policymakers should increase the minimum wage to improve standard of
living.
Qs: The opportunity cost of helping a friend move is... -
Answer:
the next best use of the time and energy spent helping your friend.
Qs: An entity has a comparative advantage if it can produce what? -
Answer:
At a lower opportunity cost than another entity.
Qs: 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
1 | Page
,Qs: 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
Qs: The law of the demand states that if price rises, quantity demanded does
what? -
Answer:
Decreases
Qs: We would expect demand for cars to increase if... -
Answer:
The price of gasoline falls.
Qs: As income increases, consumers purchase more cars. Cars what type of
good? -
Answer:
Normal goods
Qs: Supply curves show the relationship between price and quantity
demanded. Assuming the law of supply holds, supply curves are what? -
Answer:
Upward sloping
Qs: Which causes a leftward shift in the supply curve for apples? -
Answer:
2 | Page
, An increase in the price of labor
Qs: An increase in the equilibrium price of coffee could be caused by -
Answer:
A decrease in supply of coffee.
Qs: What is Consumer surplus? -
Answer:
The amount a buyer is willing to pay for a good less the amount the buyer
actually pays.
Qs: When is a market is efficient? -
Answer:
The sum of consumer and producer surplus is maximized.
Qs: What is Producer surplus? -
Answer:
The difference between the price producers collect and the minimum price
required to bring goods to market.
Qs: Rent control is an example of what? -
Answer:
A price ceiling
Qs: A price ceiling on a coffee would likely cause what? -
Answer:
A shortage of coffee
3 | Page
