ASU Econ 211 Final Exam
What is true about the CPI? - CORRECT ANSWER-The goods included in the CPI
''basket'' are fixed over time.
If the economy is assumed to be closed than what? - CORRECT ANSWER-net exports
=0
What is Public Saving? - CORRECT ANSWER-Tax revenue plus government
expenditures
A budget surplus occurs when what happens? - CORRECT ANSWER-Tax revenue
exceeds government expenditures.
What is the primary driver of economic growth? - CORRECT ANSWER-Productivity
What is a measure of productivity? - CORRECT ANSWER-Real GDP per worker
T/F: Over the past 100 years, all economies have grown at roughly the same rate. -
CORRECT ANSWER-FALSE
What would most likely lead to a decrease in the quantity of capital per worker in the
long-run? - CORRECT ANSWER-A decrease in the share of income saved by
households.
Suppose the amount of capital per worker in an economy increases. As a result, what
would happen? - CORRECT ANSWER-Productivity grows at a decreasing rate.
What are two strategies to promote economic growth? - CORRECT ANSWER-1.
Promote free trade
2. Enforce private property rights
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.
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
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 true about the CPI? - CORRECT ANSWER-The goods included in the CPI
''basket'' are fixed over time.
If the economy is assumed to be closed than what? - CORRECT ANSWER-net exports
=0
What is Public Saving? - CORRECT ANSWER-Tax revenue plus government
expenditures
A budget surplus occurs when what happens? - CORRECT ANSWER-Tax revenue
exceeds government expenditures.
What is the primary driver of economic growth? - CORRECT ANSWER-Productivity
What is a measure of productivity? - CORRECT ANSWER-Real GDP per worker
T/F: Over the past 100 years, all economies have grown at roughly the same rate. -
CORRECT ANSWER-FALSE
What would most likely lead to a decrease in the quantity of capital per worker in the
long-run? - CORRECT ANSWER-A decrease in the share of income saved by
households.
Suppose the amount of capital per worker in an economy increases. As a result, what
would happen? - CORRECT ANSWER-Productivity grows at a decreasing rate.
What are two strategies to promote economic growth? - CORRECT ANSWER-1.
Promote free trade
2. Enforce private property rights
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.
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
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
