ECO REVISION

What is it that makes this problem ‘basic’?

• It affects all economies and individuals.

• It is the most urgent target of government economic policy.

• It only affects low-income developing economies.

• It relates to the production of raw materials in the primary sector.

What can be concluded from the above information?

• The lost profit would be $300.

• The lost revenue would be $60.

• The daily opportunity cost would be 30 table cloths.

• The daily opportunity cost would be $50.

Which factors of production have been used?

• labour and capital only

• labour, capital and enterprise only

• land and labour only

• land, labour, capital and enterprise

What is an example of the purchase of a capital good?

• a farm owner purchasing additional land

• a farm owner purchasing a television

• a farm owner purchasing a tractor

• a farm worker purchasing some seeds

What might explain the change from year 1 to year 2?

• Resources have moved from the production of services to the production of goods.

• The number of workers unemployed in manufacturing has fallen.

• The producers of services have introduced better technology.

• The workers in the production of goods have become less efficient.

What is meant by the equilibrium quantity in the market for a product?

• the average quantity produced over the year

• the average quantity sold over the year

• the quantity at which profit occurs

• the quantity at which the demand and supply curves intersect

What type of market failure resulted from the development?

• ignoring external cost

• inequality of income

• lack of information

• price discrimination

What change would have caused this?

• the demand curve moved to the left

• the demand curve moved to the right

• the supply curve moved to the left

• the supply curve moved to the right

What is the government most likely to produce in a mixed economy?

• all of the services and none of the goods

• amounts of goods and services equal to those of the private sector

• no goods and services

• some of the goods and services

Which distance represents the firm’s fixed costs?

• PS

• QR

• QS

• RS