FPC1 Study Exam Questions With Correct
Answers A+
Which economic question depends on the incomes that people earn and the prices they pay for
goods and services? - AnswerFor whom?
Computers and insurance coverage produced in the United States and sold to people in other
nations are categorized...
Which economic question depends on the incomes that people earn and the prices they pay for
goods and services? - Answer✔For whom?
Computers and insurance coverage produced in the United States and sold to people in other
nations are categorized as - Answer✔U.S. exports of goods and services.
Economists classify energy and water as part of which factor of production? - Answer✔Land
A circular flow model shows the interrelationship between the ________ market and the
________ markets. - Answer✔goods; factor
Scarcity results from the fact that - Answer✔people's wants exceed the resources available to
satisfy them.
All economic questions and problems arise from - Answer✔a society's wants exceeding what its
scarce resources can produce.
What is NOT considered one of the factors of production? - Answer✔technology
If Wendy can produce more of all goods than Tommy in an hour, then - Answer✔Wendy has an
absolute advantage in all goods.
What are key ideas in the economic way of thinking? (Choose 2) - Answer✔People act rationally
when making choices.
Choices involve trade-offs.
A change in the demand for apples could not result from - Answer✔a change in the price of an
apple.
If the demand for used cars decreases after the price of a new car falls, used cars and new cars
are - Answer✔substitute goods.
Other things remaining the same, the quantity of a good or service demanded will increase if the
price of the good or service - Answer✔falls.
What could increase the supply of a product? - Answer✔lower prices for the resources used to
produce the product
What could increase the supply of gasoline? - Answer✔a decrease in the price of a resource used
to produce gasoline, such as crude oil
Changes in which factor do NOT shift the demand curve? - Answer✔the price of the good
Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a
result the equilibrium price ________, and the equilibrium quantity ________. - Answer✔falls;
increases
The phrase "a change in demand" most directly implies a - Answer✔shift of the demand curve.
Assume a competitive market is in equilibrium. There is an increase in demand, but no change in
supply. As a result the equilibrium price ________, and the equilibrium quantity ________. -
Answer✔rises; increases
What would increase the equilibrium price of bananas? (Choose 2) - Answer✔A hurricane wiped
out the banana crop in South America.
Medical research that demonstrates the cancer fighting ability of bananas.
If a firm supplies 200 units at a price of $50 and 100 units at a price of $40, using the midpoint
method, what is the price elasticity of supply? - Answer✔3.00
Consumer surplus is equal to - Answer✔marginal benefit minus price summed over the quantity
consumed.
In the summer of 2008, the price of gasoline increased greatly. If the demand curve for gasoline
did not shift, which of the following occurred? - Answer✔Consumer surplus decreased.
Mary is willing to pay $50 for a Christmas tree, John is willing to pay $45 and Jeff is willing to
pay $40. The price of a tree is $40. The total consumer surplus for Mary, John and Jeff taken
together is - Answer✔$15.
Producer surplus is the ________ summed over the quantity produced. - Answer✔price of the
good minus the marginal cost of producing it
Producer surplus - Answer✔increases if market price rises and the supply curve does not shift.
What influences the price elasticity of demand? (Choose 2) - Answer✔availability of substitutes
proportion of income spent on good
The production possibilities frontier illustrates the - Answer✔maximum combinations of goods
and services that can be produced.
2
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