UIUC ECON 103 FINAL EXAM QUESTIONS & ANSWERS
1. Joan is trying to gather information on the membership at her Zen Center.
She estimates that it will cost around $1,000 to gather the information but
expects the information to lead to increased membership of $1,100. Based on
this information, Joan should
a. gather the information since the net gain will be $100
b. gather the information regardless of the cost
c.not gather the information since it will cost money and the Zen Center is a
not-for-profit organization
d. not gather the information since she will only gain $100- Answers - a. gather the
information since the net gain will be $100
2. A person will decide not to attend a concert if the marginal cost of attending
the concert
a. is less than the cost of attending a different concert
b. is less than the marginal benefit
c.is the same as the cost of staying home
d. exceeds the marginal benefit- Answers - d. exceeds the marginal benefit
3. A person will decide to take the day off work if the
a. marginal cost exceeds the marginal benefit
b. marginal cost is less than the marginal benefit
c.person has additional sick days to spare
,d. person can make up the missed work the next day- Answers - b. marginal cost is
less than the marginal benefit
4. Opportunity costs exist because
a. buyers always have an opportunity to go to another seller
b. there are other opportunities to find ways to reduce costs
c.using resources for one activity means that their use elsewhere must be
given up
,d. sellers are unwilling to give up their product without a price- Answers - c. using
resources for one activity means that their use elsewhere must be given up
5. When the supply of surfboards increases and the demand for surfboards falls
simultaneously, the price of surfboards will
a. fall
b. either rise or fall
c.fall initially and then rise as demand increases to meet the increased supply
d. rise- Answers - a. fall
6. In the market for electric vehicles (EVs), more vehicle manufacturers are
releasing electric models at the same time that EVs are becoming more popular
with consumers. As a result, we can expect an
a. unknown change in the equilibrium quantity but a decrease in the equilibri-
um price of EVs
b. increase in the equilibrium price and quantity of EVs
c.unknown change in the equilibrium price but a decrease in the equilibrium
quantity of EVs
d. unknown change in the equilibrium price but an increase in the equilibrium
quantity of EVs- Answers - d. unknown change in the equilibrium price but an increase in the equilibrium
quantity of EVs
7. The supply of coffee has increased twice as much as the demand for coffee.
As a result, we can predict a(n)
a. decrease in the equilibrium price, but equilibrium quantity increases
b. increase in equilibrium price, but equilibrium quantity decreases
, c.decrease in equilibrium price, but equilibrium quantity is indeterminate
d. decrease in equilibrium price and equilibrium quantity- Answers - a. decrease in the
equilibrium price, but equilibrium quantity increases
8. If the producers of cotton shirts face higher cotton prices, which of the
following is likely to occur?
a. the supply of cotton shirts decreases, the equilibrium price of cotton shirts
1. Joan is trying to gather information on the membership at her Zen Center.
She estimates that it will cost around $1,000 to gather the information but
expects the information to lead to increased membership of $1,100. Based on
this information, Joan should
a. gather the information since the net gain will be $100
b. gather the information regardless of the cost
c.not gather the information since it will cost money and the Zen Center is a
not-for-profit organization
d. not gather the information since she will only gain $100- Answers - a. gather the
information since the net gain will be $100
2. A person will decide not to attend a concert if the marginal cost of attending
the concert
a. is less than the cost of attending a different concert
b. is less than the marginal benefit
c.is the same as the cost of staying home
d. exceeds the marginal benefit- Answers - d. exceeds the marginal benefit
3. A person will decide to take the day off work if the
a. marginal cost exceeds the marginal benefit
b. marginal cost is less than the marginal benefit
c.person has additional sick days to spare
,d. person can make up the missed work the next day- Answers - b. marginal cost is
less than the marginal benefit
4. Opportunity costs exist because
a. buyers always have an opportunity to go to another seller
b. there are other opportunities to find ways to reduce costs
c.using resources for one activity means that their use elsewhere must be
given up
,d. sellers are unwilling to give up their product without a price- Answers - c. using
resources for one activity means that their use elsewhere must be given up
5. When the supply of surfboards increases and the demand for surfboards falls
simultaneously, the price of surfboards will
a. fall
b. either rise or fall
c.fall initially and then rise as demand increases to meet the increased supply
d. rise- Answers - a. fall
6. In the market for electric vehicles (EVs), more vehicle manufacturers are
releasing electric models at the same time that EVs are becoming more popular
with consumers. As a result, we can expect an
a. unknown change in the equilibrium quantity but a decrease in the equilibri-
um price of EVs
b. increase in the equilibrium price and quantity of EVs
c.unknown change in the equilibrium price but a decrease in the equilibrium
quantity of EVs
d. unknown change in the equilibrium price but an increase in the equilibrium
quantity of EVs- Answers - d. unknown change in the equilibrium price but an increase in the equilibrium
quantity of EVs
7. The supply of coffee has increased twice as much as the demand for coffee.
As a result, we can predict a(n)
a. decrease in the equilibrium price, but equilibrium quantity increases
b. increase in equilibrium price, but equilibrium quantity decreases
, c.decrease in equilibrium price, but equilibrium quantity is indeterminate
d. decrease in equilibrium price and equilibrium quantity- Answers - a. decrease in the
equilibrium price, but equilibrium quantity increases
8. If the producers of cotton shirts face higher cotton prices, which of the
following is likely to occur?
a. the supply of cotton shirts decreases, the equilibrium price of cotton shirts
