ASU Econ 211 Final Exam Questions With
Correct Answers
What |does |a |production |possibilities |frontier |display? |- |CORRECT |ANSWER✔✔-Possible
|combinations |of |output |an |economy |can |produce |given |available |factors |of |production |and
|technology.
What |is |a |normative |statement? |- |CORRECT |ANSWER✔✔-Policymakers |should |increase |the
|minimum |wage |to |improve |standard |of |living.
The |opportunity |cost |of |helping |a |friend |move |is... |- |CORRECT |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? |- |CORRECT |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. |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-Wheat
|
The |law |of |the |demand |states |that |if |price |rises, |quantity |demanded |does |what? |- |CORRECT
ANSWER✔✔-Decreases
|
We |would |expect |demand |for |cars |to |increase |if... |- |CORRECT |ANSWER✔✔-The |price |of
|gasoline |falls.
, As |income |increases, |consumers |purchase |more |cars. |Cars |what |type |of |good? |- |CORRECT
ANSWER✔✔-Normal |goods
|
Supply |curves |show |the |relationship |between |price |and |quantity |demanded. |Assuming |the |law
of |supply |holds, |supply |curves |are |what? |- |CORRECT |ANSWER✔✔-Upward |sloping
|
Which |causes |a |leftward |shift |in |the |supply |curve |for |apples? |- |CORRECT |ANSWER✔✔-An
|increase |in |the |price |of |labor
An |increase |in |the |equilibrium |price |of |coffee |could |be |caused |by |- |CORRECT |ANSWER✔✔-A
|decrease |in |supply |of |coffee.
What |is |Consumer |surplus? |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-The |sum |of |consumer |and |producer
|surplus |is |maximized.
What |is |Producer |surplus? |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-A |price |ceiling
A |price |ceiling |on |a |coffee |would |likely |cause |what? |- |CORRECT |ANSWER✔✔-A |shortage |of
|coffee
What |is |minimum |wage |an |example |of? |- |CORRECT |ANSWER✔✔-A |price |floor
Correct Answers
What |does |a |production |possibilities |frontier |display? |- |CORRECT |ANSWER✔✔-Possible
|combinations |of |output |an |economy |can |produce |given |available |factors |of |production |and
|technology.
What |is |a |normative |statement? |- |CORRECT |ANSWER✔✔-Policymakers |should |increase |the
|minimum |wage |to |improve |standard |of |living.
The |opportunity |cost |of |helping |a |friend |move |is... |- |CORRECT |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? |- |CORRECT |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. |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-Wheat
|
The |law |of |the |demand |states |that |if |price |rises, |quantity |demanded |does |what? |- |CORRECT
ANSWER✔✔-Decreases
|
We |would |expect |demand |for |cars |to |increase |if... |- |CORRECT |ANSWER✔✔-The |price |of
|gasoline |falls.
, As |income |increases, |consumers |purchase |more |cars. |Cars |what |type |of |good? |- |CORRECT
ANSWER✔✔-Normal |goods
|
Supply |curves |show |the |relationship |between |price |and |quantity |demanded. |Assuming |the |law
of |supply |holds, |supply |curves |are |what? |- |CORRECT |ANSWER✔✔-Upward |sloping
|
Which |causes |a |leftward |shift |in |the |supply |curve |for |apples? |- |CORRECT |ANSWER✔✔-An
|increase |in |the |price |of |labor
An |increase |in |the |equilibrium |price |of |coffee |could |be |caused |by |- |CORRECT |ANSWER✔✔-A
|decrease |in |supply |of |coffee.
What |is |Consumer |surplus? |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-The |sum |of |consumer |and |producer
|surplus |is |maximized.
What |is |Producer |surplus? |- |CORRECT |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? |- |CORRECT |ANSWER✔✔-A |price |ceiling
A |price |ceiling |on |a |coffee |would |likely |cause |what? |- |CORRECT |ANSWER✔✔-A |shortage |of
|coffee
What |is |minimum |wage |an |example |of? |- |CORRECT |ANSWER✔✔-A |price |floor
