Economics May/June 2023 (06/09/22)

What is likely to be introduced in the market for bus travel if an economy moved from a mixed economy to a market economy?

• allowing companies to bid for bus routes
• free bus travel for school children
• maximum prices for bus travel
• subsidies to bus operators

An individual buys a ticket to visit a government-owned art gallery. How would this visit be classified by an economist?

• private and demerit good
• private and merit good
• public and demerit good
• public and merit good

The diagram shows a shift in a firm’s supply curve from S1 to S2. What may have caused the shift from S1 to S2?

• a decrease in the costs of production of the firm
• a decrease in the popularity of the firm’s product
• a decrease in the subsidy on the good
• a decrease in the tax on the good

There is a reduction in world oil supplies due to war in some supplying countries at a time when the winter in some importing countries was much colder than usual. The diagram shows the original equilibrium price, P. What will be the equilibrium price of oil in these circumstances?

• P1
• P2
• P3
• P4

Which types of good are distinguished from one another by the presence or absence of opportunity cost?

• demerit and merit goods
• economic and free goods
• inferior goods and normal goods
• private and public goods

Along which axis can the market demand curve be aggregated from individual demand curves?

• both the horizontal and vertical axis
• the horizontal axis only
• the horizontal or the vertical axis but not both
• the vertical axis only

To increase production a firm in industry X needs to install capital equipment, while a firm in industry Y needs to research and introduce a new technology. What time periods are illustrated by these cases?

• A
• B
• C
• D

Very heavy rain often causes houses to flood. The government protects the area with flood defence schemes while households buy sandbags to protect their houses. How would an economist classify these items?

• A
• B
• C
• D

What will not cause a shift in the market supply curve of a commodity?

• a change in technology
• a rise in the price of a factor input
• a rise in the price of the commodity
• the introduction of a specific tax on the commodity

When demand for a good falls, its price falls. What is the function of the price fall?

• to eliminate shortages
• to reduce consumer surplus
• to send a signal to producers
• to stimulate a further fall in demand