ASU Econ 211 Final Exam Guaranteed Success
1. What does a production possibilities frontier display?
What information does the production possibilities frontier illustrate? - ️ Possible combinations of output an economy can produce given available factors of production
and technology. ---
...
1. What does a production possibilities frontier display?
What information does the production possibilities frontier illustrate?
- ✔️ Possible combinations of output an economy can produce given available factors of production
and technology.
---
2. What is a normative statement?
How can we define a normative statement in economics?
- ✔️ Policymakers should increase the minimum wage to improve the standard of living.
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3. The opportunity cost of helping a friend move is...
What constitutes the opportunity cost when assisting a friend with moving?
- ✔️ The next best use of the time and energy spent helping your friend.
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4. An entity has a comparative advantage if it can produce what?
What defines comparative advantage for an economic agent?
- ✔️ At a lower opportunity cost than another entity.
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5. True or False: Suppose the United States has an absolute advantage in the production of oil and
wheat. This means that the U.S. would not gain from trading these goods.
, - ✔️ FALSE
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6. The United States has a comparative advantage in the production of wheat and an absolute
advantage in the production of both apples and wheat relative to Canada. If the U.S. and Canada
specialize and trade, the U.S. should produce what?
What should the U.S. specialize in if it has comparative and absolute advantages?
- ✔️ Wheat
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7. The law of demand states that if price rises, quantity demanded does what?
According to the law of demand, how does quantity demanded react to price increases?
- ✔️ Decreases
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8. We would expect demand for cars to increase if...
What situation would likely lead to an increase in car demand?
- ✔️ The price of gasoline falls.
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9. As income increases, consumers purchase more cars. Cars what type of good?
How are cars categorized based on consumer income changes?
- ✔️ Normal goods
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