ECN 211 EXAM SCRIPT 2026 QUESTIONS WITH
ANSWERS
◉ Refer to Figure 4-8. Suppose the figure shows the market demand
for Big Box e-readers. Suppose the price of the leading competitor's
e-readers, a substitute good, decreases. Which of the following
changes would occur?. Answer: a shift from D1 to D2
◉ High-school athletes who skip college to become professional
athletes. Answer: understand that the opportunity cost of attending
college is very high.
◉ A typical society strives to get the most it can from its scarce
resources. At the same time, the society attempts to distribute the
benefits of those resources to the members of the society in a fair
manner. In other words, the society faces a tradeoff between.
Answer: efficiency and equality.
◉ Which of the following statements about markets is most
accurate?. Answer: Markets are usually a good way to organize
economic activity.
◉ A technological advance in the production of the first good
increases the opportunity cost of the first good in terms of the
second good.. Answer: True
,◉ Suppose a nation is currently producing at a point inside its
production possibilities frontier. We know that. Answer: the nation
is not using all available resources or is using inferior technology or
both.
◉ Refer to Figure 2-9, Panel (a). The opportunity cost of moving
from point M to point L is. Answer: 2 donuts.
◉ Refer to Figure 3-21. Azerbaijan's opportunity cost of one bolt is.
Answer: 4 nails and Uzbekistan's opportunity cost of one bolt is 2
nails.
◉ If he devotes all of his available resources to cantaloupe
production, a farmer can produce 120 cantaloupes. If he sacrifices
1.5 watermelons for each cantaloupe that he produces, it follows
that. Answer: his opportunity cost of one watermelon is 2/3 of a
cantaloupe.
◉ Refer to Table 3-24. If England and Spain each spends all its time
producing the good in which it has a comparative advantage and the
countries agree to trade 2 units of bread for 6 units of cheese, then
England will consume. Answer: 34 units of cheese and 2 units of
bread and Spain will consume 6 units of cheese and 3 units of bread.
,◉ In a market with a binding price control,
a) the costs of production are fully reflected in the price paid.
b) the price observe reflects the scarcity of the good.
c) all of the above are true.
d) there is an imbalance between the quantity supplied by sellers
and the quantity demanded by buyers.. Answer: there is an
imbalance between the quantity supplied by sellers and the quantity
demanded by buyers.
◉ Refer to Table 6-5. Which of the following price floors would be
binding in this market?. Answer: $9
◉ Refer to Table 6-5. Suppose the government imposes a price
ceiling of $3 on this market. What will be the size of the shortage in
this market?. Answer: 75 units
◉ For which rate of inflation given below will the real interest rate
be higher than the nominal interest rate?. Answer: -0.5%
◉ If the CPI was 108.00 in 1942 and is 336.96 today, then $10 in
1942 purchased the same amount of goods and services as. Answer:
$31.20 purchases today.
, ◉ Refer to Table 24-4. The cost of the basket. Answer: increased
from 2012 to 2013 and increased from 2013 to 2014.
◉ Because the CPI is based on a fixed basket of goods, the
introduction of new goods and services in the economy causes the
CPI to overestimate the cost of living. This is so because. Answer:
when a new good is introduced, it gives consumers greater choice,
thus reducing the amount they must spend to maintain their
standard of living.
◉ A U.S. firm produces nail guns in the first quarter of 2010 and
adds them to its inventory. In the second quarter of 2010 the firm
sells the nail guns to a U.S. construction company. In which
quarter(s) is (are) GDP higher?. Answer: the first but not the second
◉ Which of the following is not included in GDP?
a) the services of an exterminator
b) the honey produced and sold by a beekeeper
c) a can of bug spray
d) All of the above are included in GDP.. Answer: All of the above are
included in GDP.
◉ Transfer payments
ANSWERS
◉ Refer to Figure 4-8. Suppose the figure shows the market demand
for Big Box e-readers. Suppose the price of the leading competitor's
e-readers, a substitute good, decreases. Which of the following
changes would occur?. Answer: a shift from D1 to D2
◉ High-school athletes who skip college to become professional
athletes. Answer: understand that the opportunity cost of attending
college is very high.
◉ A typical society strives to get the most it can from its scarce
resources. At the same time, the society attempts to distribute the
benefits of those resources to the members of the society in a fair
manner. In other words, the society faces a tradeoff between.
Answer: efficiency and equality.
◉ Which of the following statements about markets is most
accurate?. Answer: Markets are usually a good way to organize
economic activity.
◉ A technological advance in the production of the first good
increases the opportunity cost of the first good in terms of the
second good.. Answer: True
,◉ Suppose a nation is currently producing at a point inside its
production possibilities frontier. We know that. Answer: the nation
is not using all available resources or is using inferior technology or
both.
◉ Refer to Figure 2-9, Panel (a). The opportunity cost of moving
from point M to point L is. Answer: 2 donuts.
◉ Refer to Figure 3-21. Azerbaijan's opportunity cost of one bolt is.
Answer: 4 nails and Uzbekistan's opportunity cost of one bolt is 2
nails.
◉ If he devotes all of his available resources to cantaloupe
production, a farmer can produce 120 cantaloupes. If he sacrifices
1.5 watermelons for each cantaloupe that he produces, it follows
that. Answer: his opportunity cost of one watermelon is 2/3 of a
cantaloupe.
◉ Refer to Table 3-24. If England and Spain each spends all its time
producing the good in which it has a comparative advantage and the
countries agree to trade 2 units of bread for 6 units of cheese, then
England will consume. Answer: 34 units of cheese and 2 units of
bread and Spain will consume 6 units of cheese and 3 units of bread.
,◉ In a market with a binding price control,
a) the costs of production are fully reflected in the price paid.
b) the price observe reflects the scarcity of the good.
c) all of the above are true.
d) there is an imbalance between the quantity supplied by sellers
and the quantity demanded by buyers.. Answer: there is an
imbalance between the quantity supplied by sellers and the quantity
demanded by buyers.
◉ Refer to Table 6-5. Which of the following price floors would be
binding in this market?. Answer: $9
◉ Refer to Table 6-5. Suppose the government imposes a price
ceiling of $3 on this market. What will be the size of the shortage in
this market?. Answer: 75 units
◉ For which rate of inflation given below will the real interest rate
be higher than the nominal interest rate?. Answer: -0.5%
◉ If the CPI was 108.00 in 1942 and is 336.96 today, then $10 in
1942 purchased the same amount of goods and services as. Answer:
$31.20 purchases today.
, ◉ Refer to Table 24-4. The cost of the basket. Answer: increased
from 2012 to 2013 and increased from 2013 to 2014.
◉ Because the CPI is based on a fixed basket of goods, the
introduction of new goods and services in the economy causes the
CPI to overestimate the cost of living. This is so because. Answer:
when a new good is introduced, it gives consumers greater choice,
thus reducing the amount they must spend to maintain their
standard of living.
◉ A U.S. firm produces nail guns in the first quarter of 2010 and
adds them to its inventory. In the second quarter of 2010 the firm
sells the nail guns to a U.S. construction company. In which
quarter(s) is (are) GDP higher?. Answer: the first but not the second
◉ Which of the following is not included in GDP?
a) the services of an exterminator
b) the honey produced and sold by a beekeeper
c) a can of bug spray
d) All of the above are included in GDP.. Answer: All of the above are
included in GDP.
◉ Transfer payments
