ECON 201 Test queries and answers
100%
Which of the following events will NOT shift the Production Possibilities Frontier for the U.S.
outwards? - ANS✅✅5 million acres of wheat fields are converted into corn fields in order to
produce more ethanol
Out of the following resources, which on tends to DECREASE over time in the U.S. - ANS✅✅Gold
Which of the following topics is most likely to be covered in Macroeconomics? - ANS✅✅The
causes of the Economic Recession in 2008-2009
Which of these statements is a positive statement? - ANS✅✅The U.S. has the largest trade deficit
in the world
Sally decides to place another $1,000 per year in her 401k (retirement) account since she feels that
she would need more money when she retires and has enough money now. She is already putting
$4,000 in her 401k account. This scenario BEST illustrates the tenant that - ANS✅✅People make
decisions on the margin
What does each point on the Production Possibilities Frontier represent - ANS✅✅The highest
possible production of one good given a production level of another good
Which one of these resources is considered renewable natural resource - ANS✅✅Wind
Eric goes to see a movie with his girlfriend instead of working (his second choice) and he enjoys the
date. What is Eric's opportunity cost of going out to the movies? - ANS✅✅The money that he
would have earned if he worked instead
Which of the following events is most likely to increase the demand for cartridges (which provide the
link that is used in the printers)? - ANS✅✅A fall in the price of computers and laptops
Which of the following events is most likely to increase the price of cereal but decrease its quantity?
- ANS✅✅A drought that destroys half of the oat that cereal is made from
, Which of these scenarios best illustrates the substitution effect? - ANS✅✅Amelia decides to ride
the subway to work when the price of gasoline increases
Which one of these products is likely to have the largest substitution effect? - ANS✅✅Yoplait
Yogurt
What will happen if the price of a good is below the equilibrium price? - ANS✅✅There will be a
shortage and buyers will bid up the price of the good
Which of the following scenarios BEST illustrates the law of demand - ANS✅✅Americans start
driving less and flying more when the price of airline tickets drop
When the number of restaurants in the Grand Strand substantially increases the price of restaurant
meals slightly drops, but the number of restaurant goers drastically increases. This implies that... -
ANS✅✅The demand for restaurant meals is fairly horizontal
Which of the following scenarios BEST illustrates the income effect? - ANS✅✅Paris decides to go
out less after her rent increases
Konika lives in Miami Beach. She has a rich husband, a big house and multiple cars, but she wants
her own private jet plane. Under what condition does she live? - ANS✅✅Relative scarcity
Income falls due to a recession and, at the same time, the cost of steel increases. What would
happen to the price and quantity of cars as a result? - ANS✅✅Quantity will decrease, but price can
increase, decrease, or remain the same
Coal Mining Corporation in China decides to use robotics instead of miners (people) to dig for coal
because using labor to mine (dig) for coal is dangerous and expensive. Which of the basic questions
of economics is this Corporation answering? - ANS✅✅How to produce
What would happen to the equilibrium quantity of tea if a drought killed many of the plants that are
used to produce Coffee? - ANS✅✅Price and quantity will both increase
What would happen to the equilibrium and price of digital cameras if the costs of plastic and other
raw materials substantially decreased? - ANS✅✅Price will decrease but quantity will increase
100%
Which of the following events will NOT shift the Production Possibilities Frontier for the U.S.
outwards? - ANS✅✅5 million acres of wheat fields are converted into corn fields in order to
produce more ethanol
Out of the following resources, which on tends to DECREASE over time in the U.S. - ANS✅✅Gold
Which of the following topics is most likely to be covered in Macroeconomics? - ANS✅✅The
causes of the Economic Recession in 2008-2009
Which of these statements is a positive statement? - ANS✅✅The U.S. has the largest trade deficit
in the world
Sally decides to place another $1,000 per year in her 401k (retirement) account since she feels that
she would need more money when she retires and has enough money now. She is already putting
$4,000 in her 401k account. This scenario BEST illustrates the tenant that - ANS✅✅People make
decisions on the margin
What does each point on the Production Possibilities Frontier represent - ANS✅✅The highest
possible production of one good given a production level of another good
Which one of these resources is considered renewable natural resource - ANS✅✅Wind
Eric goes to see a movie with his girlfriend instead of working (his second choice) and he enjoys the
date. What is Eric's opportunity cost of going out to the movies? - ANS✅✅The money that he
would have earned if he worked instead
Which of the following events is most likely to increase the demand for cartridges (which provide the
link that is used in the printers)? - ANS✅✅A fall in the price of computers and laptops
Which of the following events is most likely to increase the price of cereal but decrease its quantity?
- ANS✅✅A drought that destroys half of the oat that cereal is made from
, Which of these scenarios best illustrates the substitution effect? - ANS✅✅Amelia decides to ride
the subway to work when the price of gasoline increases
Which one of these products is likely to have the largest substitution effect? - ANS✅✅Yoplait
Yogurt
What will happen if the price of a good is below the equilibrium price? - ANS✅✅There will be a
shortage and buyers will bid up the price of the good
Which of the following scenarios BEST illustrates the law of demand - ANS✅✅Americans start
driving less and flying more when the price of airline tickets drop
When the number of restaurants in the Grand Strand substantially increases the price of restaurant
meals slightly drops, but the number of restaurant goers drastically increases. This implies that... -
ANS✅✅The demand for restaurant meals is fairly horizontal
Which of the following scenarios BEST illustrates the income effect? - ANS✅✅Paris decides to go
out less after her rent increases
Konika lives in Miami Beach. She has a rich husband, a big house and multiple cars, but she wants
her own private jet plane. Under what condition does she live? - ANS✅✅Relative scarcity
Income falls due to a recession and, at the same time, the cost of steel increases. What would
happen to the price and quantity of cars as a result? - ANS✅✅Quantity will decrease, but price can
increase, decrease, or remain the same
Coal Mining Corporation in China decides to use robotics instead of miners (people) to dig for coal
because using labor to mine (dig) for coal is dangerous and expensive. Which of the basic questions
of economics is this Corporation answering? - ANS✅✅How to produce
What would happen to the equilibrium quantity of tea if a drought killed many of the plants that are
used to produce Coffee? - ANS✅✅Price and quantity will both increase
What would happen to the equilibrium and price of digital cameras if the costs of plastic and other
raw materials substantially decreased? - ANS✅✅Price will decrease but quantity will increase
