G9: Econ. Review Quiz: Sections 1-2

The diagram shows market demand and supply curves.

Which points show a shortage?

• Q1 – Q3

•  Q3 – Q5

•  Q2 – Q4

• Q1 – Q2

What is the basic economic problem? 

• recession

• scarcity of resources

• excess supply of goods and services

•  lack of profits

Which person makes macroeconomic decisions?

• a worker

• a bank manager

• a shareholder in a firm

• a government finance minister

The diagram shows an economy’s production possibility curve (PPC). The economy moves from point X to point Y.

What is the most likely effect of this change?

• Different quantities of the goods are produced.

• There is an immediate fall in gross domestic product.

• More people are employed.

• There is an increase in investment.

Which combination of a factor of production (FP) and its factor income (FI) is not correct?

• FP: capital

  FI: interest

• FP: land

  FI: rent

• FP: enterprise

  FI: profit

• FP: labor

  FI: dividends

What is an example of a macroeconomic aim?

• to provide consumers with greater information when buying goods and services

• to encourage greater occupational mobility of labor

• to create and maintain full employment

• to improve efficiency in the manufacturing sector of the economy

The diagram shows a shift in the supply curve for cars in China from S1 to S2

What is the most likely cause of this shift in the supply curve?

• an increase in the wages of Chinese car workers

• an increase in an indirect tax on petrol in China

• a new subsidy given to Chinese car manufacturers

• an increase in the price of cars in China

The diagram shows the global market for copper with an equilibrium point of X. Which point represents the new equilibrium after the copper producers’ costs increase and there is rapid global economic growth?

• A

• B

• C

• D

In 2018 the UK government introduced a tax on the production of sugary drinks. How would this affect the market for sugary drinks as shown on a demand and supply diagram?

• A

• B

• C

• D

In the diagram, suppliers have set the price of a product at PS. Economic theory predicts that the equilibrium price of the product will rise to PE.

What is the reason for this movement in price?

• No more of the product can be supplied.

• Some consumers are willing to pay higher prices.

• Demand for the product will increase.

• Suppliers are facing rising costs.