ECON 1000 Final Exam 2023/2024
Which of the following best describes scarcity? Answer - Unlimited wants exceed the limited resources
available
Scarcity is central to the study of economics because it implies that... Answer - every choice involves an
opportunity cost
Is it necessary for all economic systems to limit servies such as health care? Answer - Yes
A market system prevents people from getting as many goods and services as they want due to which of
the following? Answer - Their income
Why are models based on assumptions? Answer - Because models have to be simplified to be useful
Both you and Andrew are making an error in judgment by assuming that specialization should be based
upon... Answer - absolute advantage
You shouldn't necessarily do what you are better than anyone else at doing... Answer - unless your
advantage in that activity is greater than advantages you possess in other activities
Which of the following is being assumed by the media while concluding that the price in country A will
also ride to $10/bushel? Answer - Demand conditions in both countries are identical
The author suggests the market for converting land to urban uses results in "inefficient land use
allocation" because.. Answer - the marginal social cost of converting land to urban usues is greater than
the marginal private cost
In particular, the author describes inefficient land allocation as a market failure because the market
results in a quantity of land to be used for urban development that is (blank) than the efficient level.
Answer - greater
, Which of the following, if true, would support Kevin's claim? Answer - The social marginal cost of
generating the last 200MW of electricity is higher than the marginal benefit to consumers.
Which of the following is the definition of consumer surplus? Answer - The difference between the
highest price a consumer is willing to pay and the price the consumer actually pays.
Refer to the graph to the right. The graph shows the market demand for satellite television service. If the
market price is $81, which consumers reveive consumer surplus in this market? Answer - those willing to
pay more than $81
A market demand curve is derived by... Answer - adding horizontally the individual demand curves
What affects the desirability of a product?
Products become more desirable when... Answer - all of the above
If you keep the copy rather than sell it, then all of the following are correct except... Answer - you are
making a rational choice since the opportunity cost of the book is $5,000.
Any cost that remains unchanged as output changes represents a firm's... Answer - fixed cost
Any cost that changes as output changes represents a firm's... Answer - variable cost
Which of the following is most likely to be a fixed cost for a farmer? Answer - insurance premiums on
property
Which of the following is most likely to a variable cost for a business firm? Answer - cost of shipping
products
What is the law of diminishing returns?
Which of the following best describes scarcity? Answer - Unlimited wants exceed the limited resources
available
Scarcity is central to the study of economics because it implies that... Answer - every choice involves an
opportunity cost
Is it necessary for all economic systems to limit servies such as health care? Answer - Yes
A market system prevents people from getting as many goods and services as they want due to which of
the following? Answer - Their income
Why are models based on assumptions? Answer - Because models have to be simplified to be useful
Both you and Andrew are making an error in judgment by assuming that specialization should be based
upon... Answer - absolute advantage
You shouldn't necessarily do what you are better than anyone else at doing... Answer - unless your
advantage in that activity is greater than advantages you possess in other activities
Which of the following is being assumed by the media while concluding that the price in country A will
also ride to $10/bushel? Answer - Demand conditions in both countries are identical
The author suggests the market for converting land to urban uses results in "inefficient land use
allocation" because.. Answer - the marginal social cost of converting land to urban usues is greater than
the marginal private cost
In particular, the author describes inefficient land allocation as a market failure because the market
results in a quantity of land to be used for urban development that is (blank) than the efficient level.
Answer - greater
, Which of the following, if true, would support Kevin's claim? Answer - The social marginal cost of
generating the last 200MW of electricity is higher than the marginal benefit to consumers.
Which of the following is the definition of consumer surplus? Answer - The difference between the
highest price a consumer is willing to pay and the price the consumer actually pays.
Refer to the graph to the right. The graph shows the market demand for satellite television service. If the
market price is $81, which consumers reveive consumer surplus in this market? Answer - those willing to
pay more than $81
A market demand curve is derived by... Answer - adding horizontally the individual demand curves
What affects the desirability of a product?
Products become more desirable when... Answer - all of the above
If you keep the copy rather than sell it, then all of the following are correct except... Answer - you are
making a rational choice since the opportunity cost of the book is $5,000.
Any cost that remains unchanged as output changes represents a firm's... Answer - fixed cost
Any cost that changes as output changes represents a firm's... Answer - variable cost
Which of the following is most likely to be a fixed cost for a farmer? Answer - insurance premiums on
property
Which of the following is most likely to a variable cost for a business firm? Answer - cost of shipping
products
What is the law of diminishing returns?
