ECON 211 FINAL ASU EXAM QUESTIONS WITH SOLUTIONS

ECON 211 FINAL ASU EXAM QUESTIONS WITH SOLUTIONS The Opportunity Cost of an item is - ANS What you give up to get that item Total Output in an economy increases when each person specializes because - ANS Each person spends more time producing that product in which he or she has a comparative advantage The producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good - ANS Has an absolute advantage in the production of that good The quantity demanded of a good is the amount that buyers are - ANS Willing and able to purchase The market demand curve - ANS Represents the sum of the quantities demanded by all the buyers at each price of the good. The quantity supplied of a good is - ANS The amount sellers are willing and able to produce What causes equilibrium price to fall - ANS Demand increase and Supply decrease Demand and supply both decrease Demand decrease and Supply increase Demand and supply both increase Demand decrease and supply increase GDP is defined by - ANS Value of all final goods and services produced within a country in a given period of time Changes in nominal GDP reflect - ANS Both changes in price and the amount being produced The unemployment rate is computed as the number of unemployed - ANS Divided by the labor force all times 100 Some persons are counted as out of the labor force because they have made no serious attempt to find work. However some of these individuals may want to work even though they are too discouraged to make a serious effort to look. If these individuals were counted as unemployed instead of out of the labor force, then - ANS Both unemployment rate and the labor- force participation rate would be higher The CPI is used to - ANS Monitor changes in the cost of living over time Which of the following statements about real and nominal interest rates is correct - ANS When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate Sue was an accountant in 1944 and earned 12,000 That year Her son Josh earns 210,000 in 2013 The Price index in 1944 was 17.6 and 218.4 in 2013 Sue's income amounts to what percentage of josh's - ANS 70.9 During a certain year, th