ECN 212 FINAL TEST 2026 QUESTIONS
WITH CORRECT ANSWERS GRADED
A+
◍ What is the formula to calculate profit?.
Answer: TOTAL REVENUE - TOTAL COST.
◍ Explicit costs.
Answer: Input costs that require and outlay of money by the firm.
◍ Implicit costs.
Answer: Input costs that doesn't require an outlay of money by the firm.
◍ The price of sweeteners, complementary goods to coffee, decrease in price.
Answer: P coffee increases, Q coffee increases
◍ The economy experiences an overall decrease in income. (Suppose that
coffee is an inferior good).
Answer: P coffee increases, Q coffee increases
◍ What is the formula to calculate total cost?.
Answer: EXPLICIT COSTS + IMPLICIT COSTS
◍ What is the implicit costs for every business?.
Answer: The opportunity cost.
◍ Two things happen: 1) A technology is developed that makes the harvesting
of coffee beans twice as efficient and 2) the temperature falls, causing more
people to buy coffee.
Answer: Q coffee increases, P coffee ambiguous
◍ Production function.
Answer: Shows the relationship between the quantity of inputs used to make
the good and the quantity of outputs of the good.
, ◍ Someone made the observation that when income increases by 31%, the
quantity demanded of spam increases by 32%. If this is indeed true, this
means that....
Answer: Spam is a normal good
◍ Suppose that widgets are a normal good and that when income goes up, the
quantity demanded of widgets stayed the same and the price of widgets
increased. Which of the following statements about the widget market could
be true?.
Answer: The demand for widgets is unit elastic, and the supply for widgets
is perfectly inelastic
◍ Marginal product.
Answer: An increase in output that arises from an additional unit of input.
◍ Total cost curve is between what?.
Answer: Total cost and quantity of output.
◍ What happens to the cost curve and production function as production
rises?.
Answer: - The cost curve gets steeper- The production function gets flatter
◍ True or False: The advantage of having a $7 price floor instead of an $8 tax
is that there will always be less deadweight loss, and hence less inefficiency
in the market with the price floor..
Answer: True
◍ What is the formula for average total cost?.
Answer: TOTAL COST/QUANTITY
◍ Suppose that cheesecake is a luxury good and imagine your income
increases. Which statement is the most accurate?.
Answer: You buy more cheesecake
◍ What is the formula to calculate average fixed cost?.
Answer: FIXED COST/QUANTITY
◍ When trying to calculate accurately the price elasticity of demand for corn
WITH CORRECT ANSWERS GRADED
A+
◍ What is the formula to calculate profit?.
Answer: TOTAL REVENUE - TOTAL COST.
◍ Explicit costs.
Answer: Input costs that require and outlay of money by the firm.
◍ Implicit costs.
Answer: Input costs that doesn't require an outlay of money by the firm.
◍ The price of sweeteners, complementary goods to coffee, decrease in price.
Answer: P coffee increases, Q coffee increases
◍ The economy experiences an overall decrease in income. (Suppose that
coffee is an inferior good).
Answer: P coffee increases, Q coffee increases
◍ What is the formula to calculate total cost?.
Answer: EXPLICIT COSTS + IMPLICIT COSTS
◍ What is the implicit costs for every business?.
Answer: The opportunity cost.
◍ Two things happen: 1) A technology is developed that makes the harvesting
of coffee beans twice as efficient and 2) the temperature falls, causing more
people to buy coffee.
Answer: Q coffee increases, P coffee ambiguous
◍ Production function.
Answer: Shows the relationship between the quantity of inputs used to make
the good and the quantity of outputs of the good.
, ◍ Someone made the observation that when income increases by 31%, the
quantity demanded of spam increases by 32%. If this is indeed true, this
means that....
Answer: Spam is a normal good
◍ Suppose that widgets are a normal good and that when income goes up, the
quantity demanded of widgets stayed the same and the price of widgets
increased. Which of the following statements about the widget market could
be true?.
Answer: The demand for widgets is unit elastic, and the supply for widgets
is perfectly inelastic
◍ Marginal product.
Answer: An increase in output that arises from an additional unit of input.
◍ Total cost curve is between what?.
Answer: Total cost and quantity of output.
◍ What happens to the cost curve and production function as production
rises?.
Answer: - The cost curve gets steeper- The production function gets flatter
◍ True or False: The advantage of having a $7 price floor instead of an $8 tax
is that there will always be less deadweight loss, and hence less inefficiency
in the market with the price floor..
Answer: True
◍ What is the formula for average total cost?.
Answer: TOTAL COST/QUANTITY
◍ Suppose that cheesecake is a luxury good and imagine your income
increases. Which statement is the most accurate?.
Answer: You buy more cheesecake
◍ What is the formula to calculate average fixed cost?.
Answer: FIXED COST/QUANTITY
◍ When trying to calculate accurately the price elasticity of demand for corn
