First half of Section 2: the allocation of resources

Refer to the question in the image.

• a shift in the demand curve to the left

• a shift in the demand curve to the right

• a shift in the supply curve to the left

• a shift in the supply curve to the right

What is a benefit of the market system?

• competition ensures choice for consumers

• prices equal supply costs

• unemployment is kept to a minimum

• wage differentials are small

Refer to the image.

• A

• B

• C

• D

Refer to the question in the image.

• A

• B

• C

• D

What could cause the movement from point X to point Y?

• a change in tastes

• a fall in the price of chocolate

• an increase in income

• a successful advertising campaign for chocolate

What is the value of the firm's fixed costs?

Hint: fixed costs is costs that aren't affected with the output. It equals total costs - variable costs.

• $10

• $15

• $70

• $85

Which statement about the points marked on the diagram is correct?

• The distance from W to X shows a shortage of the product

• The distance from Z to Y shows a surplus of the product

• The movement from W to Y shows a fall in the quantity demanded of the product

• The movement from X to Z shows a fall in the quantity supplied of the product

The market for a good was in equilibrium. A change occurred which resulted in a new equilibrium with a higher price for the good and a lower quantity traded.

What change would have caused this?

• the demand curve moved to the left

• the demand curve moved to the right

• the supply curve moved to the left

• the supply curve moved to the right

A demand curve shows the relationship between the quantity demanded and

• a change in income

• consumer tastes

• the supply of the product

• the price of the product

Refer to the image.

• A

• B

• C

• D