Unit 1 The Economic Problem - revision

Which of the following questions is associated with the basic economic problem?

• When to produce?

• Who should produce?

• What to produce

• Where should production be located?

Which of the following might be considered a need rather than a want?

• Shelter

• Holiday

• Smartphone

• Pet dog

Which of the following would help consumers and producers to maximise their benefits and profits, respectively?

• Lower prices

• Access to more information

• Improved transport networks

• Better quality products

Which of the following is a reason why consumers may not maximise their benefits?

• Some consumers are very poor

• Opportunity costs may be too high

• Some consumers may develop buying habits that are hard to give up

• Some consumers save a high proportion of their income

Which of the following statements is true about a demand curve?

• When the price falls, the quantity demanded falls

• There is a proportionate relationship between price and the quantity demanded

• It slopes up from left to right

• When there is a price change, there is a movement along the demand curve

Which of the following will cause a demand curve to shift to the left?

• A fall in the price of a product

• A rise in income (for example)

• A rise in the price of a product

• A fall in income (for example)

Cars and petrol are an example of which goods?

• Inferior goods

• Complementary goods

• Substitute goods

• Capital goods

A rise in the price of car insurance may have which effect?

• Increase the quantity demanded for cars

• Increase the quantity demanded for car insurance

• Shift the demand curve for cars to the left

• Shift the demand curve for cars to the right

Which of the following is tru of supply?

• If price increases the supply curve will shift to the right

• If price falls, the quantity supplied will also fall

• The amount supplied and the price are inversely related

• The supply curve is always horizontal

If supply is fixed which of the following is true?

• Demand will also be fixed

• The supply curve will be vertical

• Suppliers will not offer any quantity for sale

• Supply will fall when prices rise