ECON 110 FINAL EXAM QUESTIONS
AND ANSWERS 100% PASS 2026/2027
Fundamentally, economics deals with - ANS scarcity
which of the following statements best represents the principle represented by the adage, there
ain't no such thing as a free lunch? - ANS Benjamin must decide between going to Florida or
Brazil for summer vacation
The property of society getting the most it can from its scarce resources is called -
ANS efficiency
When computing the opportunity cost of attending a pro football game as a spectator, you
should include - ANS the price you pay for the ticket and the value of your time
Making rational decisions "at the margin" means that people - ANS compare the marginal
costs and marginal benefits of each decision
If China decides to trade with France, we know that - ANS France and China can both benefit
Which of the following observations was made famous by Adam Smith in his book The Wealth
of Nations? - ANS Households and firms interacting in markets are guided by an "invisible
hand" that leads them to desirable market outcomes
@2026 ALLRIGHTS RESERVED 1
,The ability of an individual to own an exercise control over scarce resources is called -
ANS property rights
the primary determinant of a country's standard of living is - ANS the country's ability to
produce goods and services
In the short run, an increase in the money supply is likely to lead to - ANS lower
unemployment and higher inflation
Which of the following steps does an economist not take when studying the economy? -
ANS conduct a laboratory experiment in order to generate data
economists make assumptions to - ANS simplify the complex world, make it easier to
understand
in the circular-flow diagram, which of the following is not a factor of production - ANS output
another term for goods and services is - ANS output
where can an economy not produce - ANS outside its production possibilities frontier
the production possibilities frontier provides an illustration of the principle that - ANS people
face trade-offs
which of the following would likely be studied by a macroeconomist rather than a
microeconomist - ANS the effect on the economy of changes in the nation's unemployment
rate
@2026 ALLRIGHTS RESERVED 2
, which of the following statements is correct about the roles of economists - ANS in trying to
improve the world, economists are policy advisers
the president of the united states receives tax policy advice from economists in the -
ANS department of treasury
economists sometimes give conflicting advice because - ANS economists have different
values and scientific judgments
in the actual economy, households - ANS spend all of their income
The income that households and noncorporate businesses receive is called - ANS personal
income
unemployment compensation is - ANS not part of GDP because it is a transfer payment.
the carter's oldest son attends Big State University. He and his parents pay all of his fees and
tuition. These payments count in GDP as - ANS consumption of services
If total spending rises from one year to the next, then - ANS either the economy must be
producing a larger output of goods and services, or goods and services must be selling at higher
prices, or both.
If real GDP doubles and the GDP deflator doubles, then nominal GDP - ANS quadruples
the GDP deflator is the ratio of - ANS nominal GDP to real GDP multiplied by 100
@2026 ALLRIGHTS RESERVED 3
AND ANSWERS 100% PASS 2026/2027
Fundamentally, economics deals with - ANS scarcity
which of the following statements best represents the principle represented by the adage, there
ain't no such thing as a free lunch? - ANS Benjamin must decide between going to Florida or
Brazil for summer vacation
The property of society getting the most it can from its scarce resources is called -
ANS efficiency
When computing the opportunity cost of attending a pro football game as a spectator, you
should include - ANS the price you pay for the ticket and the value of your time
Making rational decisions "at the margin" means that people - ANS compare the marginal
costs and marginal benefits of each decision
If China decides to trade with France, we know that - ANS France and China can both benefit
Which of the following observations was made famous by Adam Smith in his book The Wealth
of Nations? - ANS Households and firms interacting in markets are guided by an "invisible
hand" that leads them to desirable market outcomes
@2026 ALLRIGHTS RESERVED 1
,The ability of an individual to own an exercise control over scarce resources is called -
ANS property rights
the primary determinant of a country's standard of living is - ANS the country's ability to
produce goods and services
In the short run, an increase in the money supply is likely to lead to - ANS lower
unemployment and higher inflation
Which of the following steps does an economist not take when studying the economy? -
ANS conduct a laboratory experiment in order to generate data
economists make assumptions to - ANS simplify the complex world, make it easier to
understand
in the circular-flow diagram, which of the following is not a factor of production - ANS output
another term for goods and services is - ANS output
where can an economy not produce - ANS outside its production possibilities frontier
the production possibilities frontier provides an illustration of the principle that - ANS people
face trade-offs
which of the following would likely be studied by a macroeconomist rather than a
microeconomist - ANS the effect on the economy of changes in the nation's unemployment
rate
@2026 ALLRIGHTS RESERVED 2
, which of the following statements is correct about the roles of economists - ANS in trying to
improve the world, economists are policy advisers
the president of the united states receives tax policy advice from economists in the -
ANS department of treasury
economists sometimes give conflicting advice because - ANS economists have different
values and scientific judgments
in the actual economy, households - ANS spend all of their income
The income that households and noncorporate businesses receive is called - ANS personal
income
unemployment compensation is - ANS not part of GDP because it is a transfer payment.
the carter's oldest son attends Big State University. He and his parents pay all of his fees and
tuition. These payments count in GDP as - ANS consumption of services
If total spending rises from one year to the next, then - ANS either the economy must be
producing a larger output of goods and services, or goods and services must be selling at higher
prices, or both.
If real GDP doubles and the GDP deflator doubles, then nominal GDP - ANS quadruples
the GDP deflator is the ratio of - ANS nominal GDP to real GDP multiplied by 100
@2026 ALLRIGHTS RESERVED 3
