ECN 211 COMPREHENSIVE EXAM
QUESTIONS AND CORRECT ANSWERS
STUDY GUIDE
●● Production possibilities Frontier/ Curve PPF: PPC
Answer: The curve shows what is possible within an economy
D- impossible
A&B - feasible efficient
C - feasible & inefficient
●● PPF shifts out when...
Answer: the economy can produce more of everything
●● Opportunity Cost
Answer: the cost of what you give up to get something else in terms of
time, money, or other goods
●● Absolute Advantage
Answer: Who can make most of that good
●● Comparative Advantage
Answer: The lowest opportunity cost for that good
, ●● What would allow Panama and Canada to trade?
Answer: They want to trade within their opportunity cost
●● Demand
Answer: The amount consumers are willing and able to purchase
●● Supply
Answer: The amount that producers are willing and able to produce
●● Law of demand
Answer: Demand always slopes down
●● Law of supply
Answer: Supply always slopes up
●● Equilibrium
Answer: Where the two curves meet
●● Demand shifters
Answer: - Price of substitute or complement
- Consumer preference
QUESTIONS AND CORRECT ANSWERS
STUDY GUIDE
●● Production possibilities Frontier/ Curve PPF: PPC
Answer: The curve shows what is possible within an economy
D- impossible
A&B - feasible efficient
C - feasible & inefficient
●● PPF shifts out when...
Answer: the economy can produce more of everything
●● Opportunity Cost
Answer: the cost of what you give up to get something else in terms of
time, money, or other goods
●● Absolute Advantage
Answer: Who can make most of that good
●● Comparative Advantage
Answer: The lowest opportunity cost for that good
, ●● What would allow Panama and Canada to trade?
Answer: They want to trade within their opportunity cost
●● Demand
Answer: The amount consumers are willing and able to purchase
●● Supply
Answer: The amount that producers are willing and able to produce
●● Law of demand
Answer: Demand always slopes down
●● Law of supply
Answer: Supply always slopes up
●● Equilibrium
Answer: Where the two curves meet
●● Demand shifters
Answer: - Price of substitute or complement
- Consumer preference
