ECN 212 CERTIFICATION SCRIPT 2026
QUESTIONS WITH SOLUTIONS
GRADED A+
◍ Individual Producer Surplus.
Answer: Net gain to an individual seller from selling a good; equal to the
difference between the price received and the seller's cost.
◍ Total Producer Surplus.
Answer: The sum of the individual producer surpluses of all the sellers of a
good in a market.
◍ Individual Consumer Surplus.
Answer: Net gain to an individual buyer from the purchase of a good; equal
to the difference between the buyer's willingness to pay and the price paid.
◍ Total Consumer Surplus.
Answer: The sum of the individual consumer surpluses of all the buyers of a
good in a market.
◍ Public goods are:
A. separately consumed and non-excludable
B. separately consumed and excludable
C. jointly consumed and non-excludable
D. jointly consumed and excludable.
Answer: jointly consumed and non-excludable
◍ Total Surplus.
Answer: The total net gain to consumers and producers from trading in a
market.
◍ A free rider is someone that is forced to pay for a good he or she does not
, want.(T or F).
Answer: False
◍ The two major functions of government are:
A. predictive and protective
B. promotive and predictive
C. protective and productive
D. productive and predictive.
Answer: protective and productive
◍ Consumer Surplus.
Answer: A term often used to refer both to individual consumer surplus and
to total consumer surplus.
◍ Property Rights.
Answer: The rights of owners of valuable items, whether resources or goods,
to dispose of those items as they choose.
◍ Economic Signal.
Answer: Any piece of info that helps people/businesses make better
economic decisions.
◍ Inefficiency.
Answer: A market or economy in which there are missed opportunities.
◍ Market Failure.
Answer: The failure of a market to be efficient.
◍ When there is a lack of competition, prices tend to be _________ than
equilibrium price, while the quantity produced tends to be ________ than
equilibrium quantity.
A. higher, lower
B. lower, higher
C. lower, lower
D. higher, higher.
Answer: higher, lower
, ◍ When positive externalities are present, the ________ curve ________ the
total value of the output.
A. demand, overstates
B. demand, understates
C. supply, overstates
D. supply, understates.
Answer: demand, understates
◍ Price Controls.
Answer: Legal restrictions on how high or low a market price may go.
◍ Price Ceiling.
Answer: A maximum price sellers are allowed to charge for a good or
service.
◍ Minimum Wage.
Answer: A legal floor on the wage rate for labor.
◍ Price Floor.
Answer: A minimum price buyers are required to pay for a good or service.
◍ When negative externalities are present, the ________ curve ________ the
total value of the output.
A. demand, overstates
B. supply, understates
C. demand, understates
D. supply, overstates.
Answer: demand, overstates
◍ Quantity Control.
Answer: An upper limit, set by the government, on the quantity of some
good that can be bought or sold.
◍ Quota.
Answer: The total amount of a good under a quota or quantity control that
can be legally transacted.
QUESTIONS WITH SOLUTIONS
GRADED A+
◍ Individual Producer Surplus.
Answer: Net gain to an individual seller from selling a good; equal to the
difference between the price received and the seller's cost.
◍ Total Producer Surplus.
Answer: The sum of the individual producer surpluses of all the sellers of a
good in a market.
◍ Individual Consumer Surplus.
Answer: Net gain to an individual buyer from the purchase of a good; equal
to the difference between the buyer's willingness to pay and the price paid.
◍ Total Consumer Surplus.
Answer: The sum of the individual consumer surpluses of all the buyers of a
good in a market.
◍ Public goods are:
A. separately consumed and non-excludable
B. separately consumed and excludable
C. jointly consumed and non-excludable
D. jointly consumed and excludable.
Answer: jointly consumed and non-excludable
◍ Total Surplus.
Answer: The total net gain to consumers and producers from trading in a
market.
◍ A free rider is someone that is forced to pay for a good he or she does not
, want.(T or F).
Answer: False
◍ The two major functions of government are:
A. predictive and protective
B. promotive and predictive
C. protective and productive
D. productive and predictive.
Answer: protective and productive
◍ Consumer Surplus.
Answer: A term often used to refer both to individual consumer surplus and
to total consumer surplus.
◍ Property Rights.
Answer: The rights of owners of valuable items, whether resources or goods,
to dispose of those items as they choose.
◍ Economic Signal.
Answer: Any piece of info that helps people/businesses make better
economic decisions.
◍ Inefficiency.
Answer: A market or economy in which there are missed opportunities.
◍ Market Failure.
Answer: The failure of a market to be efficient.
◍ When there is a lack of competition, prices tend to be _________ than
equilibrium price, while the quantity produced tends to be ________ than
equilibrium quantity.
A. higher, lower
B. lower, higher
C. lower, lower
D. higher, higher.
Answer: higher, lower
, ◍ When positive externalities are present, the ________ curve ________ the
total value of the output.
A. demand, overstates
B. demand, understates
C. supply, overstates
D. supply, understates.
Answer: demand, understates
◍ Price Controls.
Answer: Legal restrictions on how high or low a market price may go.
◍ Price Ceiling.
Answer: A maximum price sellers are allowed to charge for a good or
service.
◍ Minimum Wage.
Answer: A legal floor on the wage rate for labor.
◍ Price Floor.
Answer: A minimum price buyers are required to pay for a good or service.
◍ When negative externalities are present, the ________ curve ________ the
total value of the output.
A. demand, overstates
B. supply, understates
C. demand, understates
D. supply, overstates.
Answer: demand, overstates
◍ Quantity Control.
Answer: An upper limit, set by the government, on the quantity of some
good that can be bought or sold.
◍ Quota.
Answer: The total amount of a good under a quota or quantity control that
can be legally transacted.
