20-21 Economics Revision (2)

Which of these would cause the supply curve to shift to the left?

• A fall in price.

• A rise in the cost of raw materials.

• A government subsidy.

• A maximum price.

“I would still get the benefits of national defense even if I refuse to pay for it.” This statement shows the existence of …

• free goods.

• public goods that are non-excludable.

• Veblen goods.

• public goods that are non-rival.

Which of the following best describes the change shown here?

• An extension of supply has led to a rise in demand.

• A contraction in supply has led to a rise in demand.

• An increase in supply has led to an extension in demand.

• An increase in supply has led to a contraction in demand.

Which combination of resources and wants illustrates the basic economic problem?

• A

• B

• C

• D

Why is opportunity cost important in all societies?

• Governments have a limited amount of money.

• We have limited wants but unlimited resources.

• We have unlimited wants but limited resources.

• It tells us for whom to produce.

Which of these is most likely to make demand inelastic?

• The good is considered to be a luxury.

• There are no close substitutes for the product.

• There is only one company that produces the good.

• Consumers spend a big percentage of their income on the product.

Which of these is most likely to be the opportunity cost of a decision to build a new railway line between two towns?

• Some houses may have to be destroyed to make space for the line.

• The increase in demand for labour in the area may push up wages.

• There will be additional costs from new stations and bridges.

• Society cannot use the same resources to build a new road between the towns.