ECO101

The free market involves:

• The free provision of products by the state

• The subsidizing of products by the

  government

• Market forces of supply and demand

• All trade occurring via barter

Economic growth can be shown by:

• An inward shift of the production possibility frontier

• A movement along the

  production possibility frontier

• An outward shift of the production possibility frontier

• A decision by the government to produce inside the production possibility frontier

Which best describes a demand curve?

• The quantity consumers would like to buy in an ideal world

• The quantity

  consumers are willing to sell

• The quantity consumers are willing and able to buy at

  each and every income all other things unchanged

• The quantity consumers are

  willing and able to buy at each and every price all other things unchanged

If the demand curve for product A moves to the right, and the price of product B decreases, it can be concluded that:

• A and B are substitute goods

• A and B are complementary goods

• A is an inferior good, and B is a superior good

• Both goods A and B are inferior

According to the law of diminishing marginal utility:

• Utility is at a maximum with the first unit

• Increasing units of consumption

  increase the marginal utility

• Marginal product will fall as more units are consumed

• Total utility will rise at a falling rate as more units are consumed

Calculate the average fixed cost (AFC), for a level of production Q = 20, knowing that the total cost function is: TC = 200 + 3Q + 2Q²

• 1060

• 2OO

• 20

• 10

Calculate the Total fixed cost (TFC), for a level of production Q = 20, knowing that the total cost function is: TC = 200 + 3Q + 2Q²

• 1060

• 200

• 20

• 100

Calculate the average Variable cost (AFC), for a level of production Q = 20, knowing that the total cost function is: TC = 200 + 3Q + 2Q²

• 860

• 1060

• 43

• 430

Calculate the Total Variable cost (AFC), for a level of production Q = 20, knowing that the total cost function is: TC = 200 + 3Q + 2Q²

• 860

• 1060

• 200

• 106

The imposition of an indirect tax will lead to?

• A higher equilibrium price and higher output

• A higher equilibrium price and

  lower output

• A lower equilibrium price and lower output

• A lower equilibrium price and higher output