ECON 103 GMU FINAL EXAM QUESTIONS &
ANSWERS
Which of the following is among the reasons identified by Adam Smith for why the
division of labor increases an economy's total output? - Answers -Specialization of
workers is more likely to encourage the development of machinery to perform
specialized tasks.
Which of the following WILL NOT cause the market demand for reading lamps to
increase? (assume that reading lamps are a normal good) - Answers -A decrease in
consumers' incomes.
True or False: In a world with only two goods -MP3 players and jeans- if sally has a
comparative advantage over Sam in the production of MP3 players, then Sam
necessarily has a comparative advantage over Sally in the production of jeans. -
Answers -True
True or False: All else unchanged, a fall in the price of bottled water will cause the
quantity demanded of water to rise. - Answers -True
The Ad Hominem Fallacy - Answers -Committed whenever someone judges an
argument, not by the strength or weakness of the argument itself, but instead
exclusively by the identity of the person making the argument.
The name of tractors, buildings, and other goods that are built only because these
goods are useful in the production of other goods or services is: - Answers -Capital
Goods
Which of the following WILL NOT cause the demand for tickets to attend (in person, at
stadiums) professional football games to fall? - Answers -A rise in the price of tickets to
professional baseball games, if tickets to professional baseball games and tickets to
professional football games are substitute goods.
Which of the following is the most likely to increase the elasticity of demand for tickets to
attend (in person, at stadiums) games of professional football? - Answers -The creation
of a new, popular spectator sport called "feetball" which is a good substitute, in the eyes
of many sports fans, for professional football.
The "amount consumers actually get" curve is shaped most like which of the following?
- Answers -> (greater than sign)
Which of the following will cause the demand for inferior good Z to fall? - Answers -A
rise in customers incomes
, Which of the following will cause the supply of inferior good z to fall? - Answers -None
of the above
Adam Smith Argued that the chief cause of humankind's high and growing material
prosperity (the 'wealth of nations') is: - Answers -The division of labor
Sam accurately observed that the sun rose after the rooster crowed. From this
observation Sam concludes that a crowing rooster causes the sun to rise - Answers -
Sam commits the "post hoc, ergo propter hoc" Fallacy
If tortilla chips and guac are complementary goods for each other, which of the following
events will cause the demand for tortilla chips to rise? - Answers -A fall in the price of
guac.
Suppose that tortilla chips and potato chips are substitute goods for each other, which
of the following can cause the demand for potato chips to fall? - Answers -A fall in the
price of tortilla chips.
Suppose that potato chips are a normal good. Which of the following will cause the
demand for potato chips to rise? - Answers -A rise in consumers income.
If the price of the raw material bauxite, used to make aluminum, falls: - Answers -The
supply curve of aluminum will shift to the right.
If aluminum and tin are substitute goods, then the higher price of bauxite used to make
aluminum will: - Answers -have no predictable effect on the price of tin.
The fact that demand curves slope downward and to the right- that is the law of
demand, explained by the: - Answers -Law of diminishing marginal utility
According to my definition in class, of economists meaning of "self-interest" which of the
following is inconsistent with that meaning? - Answers -Gloria in Nigeria gives her last
morsel of food to a stranger across town rather than to her own starving child.
Jaclyn has transitive preferences if: - Answers -She'd prefer to date Aaron rather than
Brett; prefer to date Brett rather than Chuck; and prefer to date Aaron rather than
Chuck.
Which of the following formulas do economists use to calculate the elasticity of demand
for any given change in price? - Answers -E=% /_\ Q(d) divided by % /_\ P
True False: adding the capital account to the current account sometimes, but NOT
always, yields a value of zero - Answers -False, it always equals zero
ANSWERS
Which of the following is among the reasons identified by Adam Smith for why the
division of labor increases an economy's total output? - Answers -Specialization of
workers is more likely to encourage the development of machinery to perform
specialized tasks.
Which of the following WILL NOT cause the market demand for reading lamps to
increase? (assume that reading lamps are a normal good) - Answers -A decrease in
consumers' incomes.
True or False: In a world with only two goods -MP3 players and jeans- if sally has a
comparative advantage over Sam in the production of MP3 players, then Sam
necessarily has a comparative advantage over Sally in the production of jeans. -
Answers -True
True or False: All else unchanged, a fall in the price of bottled water will cause the
quantity demanded of water to rise. - Answers -True
The Ad Hominem Fallacy - Answers -Committed whenever someone judges an
argument, not by the strength or weakness of the argument itself, but instead
exclusively by the identity of the person making the argument.
The name of tractors, buildings, and other goods that are built only because these
goods are useful in the production of other goods or services is: - Answers -Capital
Goods
Which of the following WILL NOT cause the demand for tickets to attend (in person, at
stadiums) professional football games to fall? - Answers -A rise in the price of tickets to
professional baseball games, if tickets to professional baseball games and tickets to
professional football games are substitute goods.
Which of the following is the most likely to increase the elasticity of demand for tickets to
attend (in person, at stadiums) games of professional football? - Answers -The creation
of a new, popular spectator sport called "feetball" which is a good substitute, in the eyes
of many sports fans, for professional football.
The "amount consumers actually get" curve is shaped most like which of the following?
- Answers -> (greater than sign)
Which of the following will cause the demand for inferior good Z to fall? - Answers -A
rise in customers incomes
, Which of the following will cause the supply of inferior good z to fall? - Answers -None
of the above
Adam Smith Argued that the chief cause of humankind's high and growing material
prosperity (the 'wealth of nations') is: - Answers -The division of labor
Sam accurately observed that the sun rose after the rooster crowed. From this
observation Sam concludes that a crowing rooster causes the sun to rise - Answers -
Sam commits the "post hoc, ergo propter hoc" Fallacy
If tortilla chips and guac are complementary goods for each other, which of the following
events will cause the demand for tortilla chips to rise? - Answers -A fall in the price of
guac.
Suppose that tortilla chips and potato chips are substitute goods for each other, which
of the following can cause the demand for potato chips to fall? - Answers -A fall in the
price of tortilla chips.
Suppose that potato chips are a normal good. Which of the following will cause the
demand for potato chips to rise? - Answers -A rise in consumers income.
If the price of the raw material bauxite, used to make aluminum, falls: - Answers -The
supply curve of aluminum will shift to the right.
If aluminum and tin are substitute goods, then the higher price of bauxite used to make
aluminum will: - Answers -have no predictable effect on the price of tin.
The fact that demand curves slope downward and to the right- that is the law of
demand, explained by the: - Answers -Law of diminishing marginal utility
According to my definition in class, of economists meaning of "self-interest" which of the
following is inconsistent with that meaning? - Answers -Gloria in Nigeria gives her last
morsel of food to a stranger across town rather than to her own starving child.
Jaclyn has transitive preferences if: - Answers -She'd prefer to date Aaron rather than
Brett; prefer to date Brett rather than Chuck; and prefer to date Aaron rather than
Chuck.
Which of the following formulas do economists use to calculate the elasticity of demand
for any given change in price? - Answers -E=% /_\ Q(d) divided by % /_\ P
True False: adding the capital account to the current account sometimes, but NOT
always, yields a value of zero - Answers -False, it always equals zero
