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ECON 201 FINAL EXAM Questions, Answers, Rationales
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ECON 201 FINAL EXAM Questions, Answers, Rationales
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ECON 201 FINAL EXAMStudy online at https://quizlet.com/_fpxyw6
1. Table 2.1 Kaitlyn and Larissa have formed a dog b. 4
bathing and grooming business. The number of dogs
they can bathe or groom in any given day is depicted
in Table 2.1. The opportunity cost of grooming the
third dog in a day is bathing ________ dog(s).
a. 3
b. 4
c. 5
d. 18
2. Suppose that you own a house. What is the opportu- b. The opportuni-
nity cost of living in the house? ty cost is the rent
a. There is no opportunity cost unless you could set you could have re-
up a business in the house. ceived from a ten-
b. The opportunity cost is the rent you could have ant if you didn't live
received from a tenant if you didn't live there. there.
c. The opportunity cost is the cost of your monthly
mortgage payment plus bills.
d. There is no opportunity cost because you own the
house.
3. Kaitlyn and Larissa have formed a dog bathing and b. 2
grooming business business. The number of dogs
they can bathe or groom in any given day is depicted
in Table 2.1. The opportunity cost of grooming the first
dog in a day is bathing ________ dog(s).
a. 1 b. 2 c. 24 d. 25
4. Steven lives in a big city where there is a shortage of d. The opportuni-
parking. He has a parking spot in his driveway where ty cost of using
he parks his car. Which of the following statements is the parking spot is
most correct? the price he could
charge someone
a. The opportunity cost depends on how much else for using the
Steven's mortgage payment is. spot.
b. Steven has a lower opportunity cost of owning a
car than his neighbor, who must rent a parking spot.
c. The opportunity cost of using the spot is zero,
because Steven owns the house
, ECON 201 FINAL EXAM
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d. The opportunity cost of using the parking spot is
the price he could charge someone else for using the
spot.
5. Refer to Table 2.4. The principle of diminishing re- a. second
turns sets in with the addition of the tank of fertilizer.
a. second
b. third
c. fourth
d. fifth
6. Diminishing returns occurs because d. one of the inputs
a. consumers don't buy enough of the products pro- in the production
duced. process is fixed.
b. not enough people have jobs
c. two people have not satisfied their self-interests.
d. one of the inputs in the production process is fixed.
7. In table 2.3, the principle of diminishing returns first c. 4
occurs when how many workers are hired?
a. 2 b. 3 c. 4 d. 5
8. According to the principle of diminishing returns, an b. False
additional worker decreases total output.
a. True b. False
9. Kaitlyn and Larissa have formed a dog bathing and d. 7
grooming business. The number of dogs they can
bathe or groom in any given day is depicted in Table
2.1. The opportunity cost of grooming the sixth dog
in a day is bathing ________dog(s).
a. 0 b. 5 c. 6 d. 7
10. If the demand for jelly decreases, and the price of a. the equilibrium
grapes (used to make jelly) rises price of jelly might
rise or fall, and the
a. the equilibrium price of jelly might rise or fall, and equilibrium quanti-
the equilibrium quantity of jelly falls. ty of jelly falls.
b. the equilibrium price of jelly rises and the equilib-
rium quantity of jelly might rise or fall.
, ECON 201 FINAL EXAM
Study online at https://quizlet.com/_fpxyw6
c. the equilibrium price of jelly might rise or fall, and
the equilibrium quantity of jelly rises.
d. the equilibrium price of jelly falls and the equilibri-
um quantity of jelly might rise or fall.
Demand Down [P Q ] , Supply Down from P(inputs) Up
[P , Q ] P ~, Q
11. Fig. 4.2 illustrates the supply and demand for t-shirts. c. price will de-
If the actual price of t-shirts is $15, we would expect crease until quan-
that tity demanded
a. supply will increase until quantity demanded equals quantity
equals quantity supplied. supplied.
b. demand will decrease until quantity demanded
equals quantity supplied.
c. price will decrease until quantity demanded equals
quantity supplied.
d. there will be no change in the price since the mar-
ket is in equilibrium.
12. Suppose that a new advertising campaign extolling c. the equilibrium
the virtues of apple juice is successful, & a major price of apple juice
freeze destroys half of the country's apple crop. What rises & the equi-
happens to the price & quantity of apple juice? librium quantity of
a. the equilibrium price of apple juice might rise or fall apple juice might
& the equilibrium quantity of apple juice falls. rise or fall.
b. the equilibrium price of apple juice falls & the
equilibrium quantity of apple juice might rise or fall.
c. the equilibrium price of apple juice rises & the
equilibrium quantity of apple juice might rise or fall.
d. the equilibrium price of apple juice might rise or fall
& the equilibrium quantity of apple juice rises.
Demand UP, Supply Down.
Ad campaign Demand UP Major Freeze Supply DOWN
13. Suppose that in 2011, 3 million plasma TVs were pur- a. There was an
chased at $950 each, while in 2012, 4 million plasma advance in plas-
TVs were purchased at $800 each. What might have
, ECON 201 FINAL EXAM
Study online at https://quizlet.com/_fpxyw6
caused this change? ma TV manufac-
turing technology.
a. There was an advance in plasma TV manufacturing
technology.
b. The price of LCD TVs (a substitute for plasma TVs)
fell.
c. There were fewer workers in plasma TV manufac-
turing.
d. The price of LCD TVs (a substitute for plasma TVs)
rose.
Price , Quantity SUPPLY increase.
14. When demand decreases & the demand curve shifts c. decreases; de-
to the left, equilibrium price ________ & equilibrium creases
quantity ________.
a. increases; increases
b. decreases; increases
c. decreases; decreases
d. increases; decreases
15. Suppose that in October the price of a cup of cafe a. The price of cof-
latte was $2.50 & 400 lattes were consumed. In No- fee beans (an in-
vember the price of a latte was $2.00 & 600 lattes were put of production
consumed. What might have of cafe lattes) fell.
caused this change?
a. The price of coffee beans (an input of production of
cafe lattes) fell.
b. The price of coffee beans (an input of production of
cafe lattes) rose.
c. The price of tea (a substitute for cafe lattes) fell.
d. The price of tea (a substitute for cafe lattes) rose.
16. Figure 4.4 illustrates the supply of tacos. An increase c. S2 to S1.
in the price of ground beef, which is used to make
tacos, would most likely cause a movement from
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