Economics Quiz

What explains the shape of the production possibility curve?

• Coconuts and fish are perfect complements.

• Coconuts and fish are perfect substitutes.

• The inhabitants consume more fish than coconuts.

• The opportunity cost of increasing fish production is constant.

What is the opportunity cost of visiting the museum?

• $40

• $80

• $120

• $160

Which type of economic statement is illustrated by each comment?

• normative

• normative

• normative

• positive

• positive

Which change in the way resources are allocated in an economy is consistent with moving from a planned economy to a market economy?

• A minimum price guarantee for apple producers is removed.

• A new government authority is established to monitor inefficiencies in apple production.

• The production of apples is subsidised to increase output.

• The sale of apples has a maximum price imposed.

In which circumstance will the total expenditure by consumers on a good increase when its price increases?

• Demand for the good is income elastic.

• Demand for the good is price inelastic.

• The price of a complementary good also increases.

• The price of substitute goods also increases.

When will a manufacturer’s ability to increase the quantity supplied in the short run be greater?

• when labour is immobile

• when spare capacity exists

• when the product is perishable

• when unemployment is low

What must be correct when the free market for a good is in disequilibrium?

• Consumers can buy all of the good that they demand at the market price.

• Producers can sell all of the good that they supply at the market price.

• The market price of the good will not change.

• The quantity of the good demanded differs from the quantity supplied.

What is the effect in the fertiliser market of an increase in the demand for electricity?

• The price of fertiliser falls and the quantity demanded rises.

• The price of fertiliser falls and the quantity supplied falls.

• The price of fertiliser rises and the quantity demanded falls.

• The price of fertiliser rises and the quantity supplied rises.

What is the new equilibrium price?

• $45

• $40

• $35

• $30

What happens to the value of price elasticity of demand (PED) when there is a movement from point X to point Y and what describes the value at point Y?

• fall, elastic

• fall, inelastic

• rise, elastic

• unchanged, unitary