ECON104 Quiz Questions
CORRECT ANSWERS 2025
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
For the rancher, the opportunity cost of one pound of meat is
Select one:
a. 5 pounds of meat
b. 1 pound of meat
c. 0.2 pound of potatoes
d. 5 pounds of potatoes - CORRECT-ANSWERS-d. 5 pounds of potatoes
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
The farmer and rancher both could benefit by the farmer's specialising
in ............ and the rancher's specialising in ..............
Select one:
a. meat, potatoes
b. potatoes, meat
c. neither good, meat
d. They cannot benefit by specialisation and trade. - CORRECT-ANSWERS-a.
meat, potatoes
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
The farmer has a comparative advantage in ............. and the rancher has an
absolute advantage in .................
Select one:
a. both goods, neither good
b. meat, both goods
c. meat, neither good
d. potatoes, neither good - CORRECT-ANSWERS-b. meat, both goods
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
,The farmer has an absolute advantage in .......... and the rancher has a
comparative advantage in ...............
Select one:
a. meat, meat
b. potatoes, potatoes
c. neither good, potatoes
d. neither good, meat - CORRECT-ANSWERS-c. neither good, potatoes
Economics is defined as
Select one:
a. the study of business
b. the study of how society controls prices and output
c. the study of how society manages its scarce resources
d. the study of government regulation - CORRECT-ANSWERS-c. the study of
how society manages its scarce resources
In the second half of the nineteenth century, grasshoppers caused great
destruction to crops in the American Midwest. To rid the area of the insects,
states paid large bounties for each bushel of dead grasshoppers. In some
cases, farmers began growing and harvesting grasshoppers rather than
wheat. This is an example of
Select one:
a. profit maximisation
b. irrational behaviour
c. rational response to economic incentives
d. the need for a subsidy - CORRECT-ANSWERS-c. rational response to
economic incentives
Paul decides to spend an hour playing football rather than studying or
working at $6 per hour. His trade off is
Select one:
a. nothing, because he enjoys playing football more than working or studying
b. the benefit to his marks from studying for an hour or the $6 he could have
earned
c. the increase in skill he obtains from playing football for that hour
d. nothing, because he spent $6 for admission into the sports complex to
play football - CORRECT-ANSWERS-b. the benefit to his marks from studying
for an hour or the $6 he could have earned
The opportunity cost of going to university is
Select one:
a. the sum of all the money a student spends on food, clothing, books,
transportation, tuition, lodging and other expenses
b. the value of the best opportunity a student gives up to attend university
c. zero for students who are fortunate enough to have all of their university
expenses paid by someone else
, d. zero, since a university education will allow a student to earn a larger
income after graduation - CORRECT-ANSWERS-b. the value of the best
opportunity a student gives up to attend university
Demand is said to be elastic
Select one:
a. if the price of the good responds only slightly to changes in the quantity
demanded
b. if the demand shifts only slightly when the price of the good changes
c. if buyers respond substantially to changes in the price of the good
d. if the quantity demanded changes only slightly when the price of the good
changes - CORRECT-ANSWERS-c. if buyers respond substantially to changes
in the price of the good
Which of these statements best represents the law of demand?
Select one:
a. When buyers' tastes for a good increase, they purchase more of the good.
b. When income levels increase, buyers respond by purchasing more of most
goods.
c. When the price of a good falls, buyers respond by purchasing more of the
good.
d. When buyers' demands for a good increase, the price of the good will
increase. - CORRECT-ANSWERS-c. When the price of a good falls, buyers
respond by purchasing more of the good.
If peas and beans are substitute goods, an increase in the cost of production
of peas will most likely result in
Select one:
a. an increase in demand for beans and a decrease in supply of peas.
b. an increase in demand for beans and a decrease in the quantity
demanded of peas.
c. an increase in the quantity supplied of beans, and a decrease in the supply
of peas.
d. all of the above. - CORRECT-ANSWERS-d. all of the above.
Price elasticity of demand measures
Select one:
a. how much the price of a good changes when there is a change in the
quantity demanded
b. how much the quantity demanded responds to a change in the price
c. how much the price of a good changes when there is a change in the
number of buyers
d. how much the demand shifts for a given change in the price of the good -
CORRECT-ANSWERS-b. how much the quantity demanded responds to a
change in the price
CORRECT ANSWERS 2025
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
For the rancher, the opportunity cost of one pound of meat is
Select one:
a. 5 pounds of meat
b. 1 pound of meat
c. 0.2 pound of potatoes
d. 5 pounds of potatoes - CORRECT-ANSWERS-d. 5 pounds of potatoes
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
The farmer and rancher both could benefit by the farmer's specialising
in ............ and the rancher's specialising in ..............
Select one:
a. meat, potatoes
b. potatoes, meat
c. neither good, meat
d. They cannot benefit by specialisation and trade. - CORRECT-ANSWERS-a.
meat, potatoes
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
The farmer has a comparative advantage in ............. and the rancher has an
absolute advantage in .................
Select one:
a. both goods, neither good
b. meat, both goods
c. meat, neither good
d. potatoes, neither good - CORRECT-ANSWERS-b. meat, both goods
Labour hours needed to make one pound of:
Farmer Rancher
Meat 10 5
Potatoes 4 1
,The farmer has an absolute advantage in .......... and the rancher has a
comparative advantage in ...............
Select one:
a. meat, meat
b. potatoes, potatoes
c. neither good, potatoes
d. neither good, meat - CORRECT-ANSWERS-c. neither good, potatoes
Economics is defined as
Select one:
a. the study of business
b. the study of how society controls prices and output
c. the study of how society manages its scarce resources
d. the study of government regulation - CORRECT-ANSWERS-c. the study of
how society manages its scarce resources
In the second half of the nineteenth century, grasshoppers caused great
destruction to crops in the American Midwest. To rid the area of the insects,
states paid large bounties for each bushel of dead grasshoppers. In some
cases, farmers began growing and harvesting grasshoppers rather than
wheat. This is an example of
Select one:
a. profit maximisation
b. irrational behaviour
c. rational response to economic incentives
d. the need for a subsidy - CORRECT-ANSWERS-c. rational response to
economic incentives
Paul decides to spend an hour playing football rather than studying or
working at $6 per hour. His trade off is
Select one:
a. nothing, because he enjoys playing football more than working or studying
b. the benefit to his marks from studying for an hour or the $6 he could have
earned
c. the increase in skill he obtains from playing football for that hour
d. nothing, because he spent $6 for admission into the sports complex to
play football - CORRECT-ANSWERS-b. the benefit to his marks from studying
for an hour or the $6 he could have earned
The opportunity cost of going to university is
Select one:
a. the sum of all the money a student spends on food, clothing, books,
transportation, tuition, lodging and other expenses
b. the value of the best opportunity a student gives up to attend university
c. zero for students who are fortunate enough to have all of their university
expenses paid by someone else
, d. zero, since a university education will allow a student to earn a larger
income after graduation - CORRECT-ANSWERS-b. the value of the best
opportunity a student gives up to attend university
Demand is said to be elastic
Select one:
a. if the price of the good responds only slightly to changes in the quantity
demanded
b. if the demand shifts only slightly when the price of the good changes
c. if buyers respond substantially to changes in the price of the good
d. if the quantity demanded changes only slightly when the price of the good
changes - CORRECT-ANSWERS-c. if buyers respond substantially to changes
in the price of the good
Which of these statements best represents the law of demand?
Select one:
a. When buyers' tastes for a good increase, they purchase more of the good.
b. When income levels increase, buyers respond by purchasing more of most
goods.
c. When the price of a good falls, buyers respond by purchasing more of the
good.
d. When buyers' demands for a good increase, the price of the good will
increase. - CORRECT-ANSWERS-c. When the price of a good falls, buyers
respond by purchasing more of the good.
If peas and beans are substitute goods, an increase in the cost of production
of peas will most likely result in
Select one:
a. an increase in demand for beans and a decrease in supply of peas.
b. an increase in demand for beans and a decrease in the quantity
demanded of peas.
c. an increase in the quantity supplied of beans, and a decrease in the supply
of peas.
d. all of the above. - CORRECT-ANSWERS-d. all of the above.
Price elasticity of demand measures
Select one:
a. how much the price of a good changes when there is a change in the
quantity demanded
b. how much the quantity demanded responds to a change in the price
c. how much the price of a good changes when there is a change in the
number of buyers
d. how much the demand shifts for a given change in the price of the good -
CORRECT-ANSWERS-b. how much the quantity demanded responds to a
change in the price
