AS Paper one (SRT) - Economics

What is the basic economic problem?

• excess supply of goods and services

• lack of profits

• recession

• scarcity of resources

The diagram shows a production possibility curve. What can be deduced from the shape of this curve?

• decreasing marginal returns to consumption

• decreasing opportunity costs of consumption

• increasing opportunity costs of production

• increasing returns to scale

Which statement is correct?

• Private goods are both non-rival and non-excludable.

• Private goods are only provided by the private sector

• Public goods are both non-rival and non-excludable

• Public goods do not incur opportunity costs.

Which one of the following is the best example of the rationing function of the price mechanism?

• A

• B

• C

• D

The income elasticity of demand for bus travel is estimated to be –1.5. This implies that:

• A

• B

• C

• D

The diagram shows the demand for and supply of passenger rail services

• A

• B

• C

• D

A 2.5% increase in new build house prices in one region of the UK causes a 10% increase in the number of houses built. Ceteris paribus, this suggests that supply of new house builds is:

• A

• B

• C

• D

A, B, C, D?

• A

• B

• C

• D

A ban on diesel vehicles in city centres will reduce the demand for diesel fuel. This is because:

• A

• B

• C

• D

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

• A

• B

• C

• D