REVIEW ECON VII

If the price of SUGAR increases, the demand curve for bread will _____

• shift to the left.

• shift to the right.

•  increase.

• 1. remain unchanged.

1. Which of the following would not shift the demand curve for beef?

• 1. a widely publicized study which indicates beef increases one's cholesterol

• 1. a reduction in the price of cattle feed

• 1. an effective advertising campaign by pork producers

• 1. a change in the incomes of beef consumers

Movement along the demand curve illustrates ______

• 1. decreasing price of product

• 1. increasing consumer income

• 1. changing consumer tastes

• 1. changing prices of related products

The law of demand states, with increase in price there is ____

• 1. decrease in quantity demanded

• 1. increase in quantity demanded

• 1. decreased demand

• 1. increased demand

Many developing countries are losing their better-educated nationals to richer countries including young healthcare workers and entrepreneurs. Which point in the PPC represents this?

• A

• B

• 1. C

• 1. D

1. A firm can produce a number of possible combinations of two goods. It can either produce 500 of good X and 300 of good Y, or 600 X and 250 Y. What is the opportunity cost of producing a 300 of good Y? 

• 100 X

• 250 Y

• 500 X  

• 700X

A country’s infrastructure was damaged by a natural disaster. Before the disaster, the country was producing at point Y on the production possibility curve (PPC). Which point represents the country’s production immediately after the disaster?

• A

• B

• 1. C

• 1. D

1. The diagram shows the choices for an individual between leisure and earnings.

What is the opportunity cost to the individual of the extra earnings when moving from position X to position Y?

• $20

• 4 hours leisure

• 1. $80

• 1. 8 hours leisure

1. A student leaves school and decides to spend the next two years at a college to improve her qualifications. What is the opportunity cost to the student of taking this decision? 

• 1. the cost of the course fees at the college 

• 1. the increase in job opportunities she will have as a result of her extra qualifications

• 1. the lost production due to her not being in work 

• 1. the money she would have earned if she had been in work for the two years 

1. Sam wrote a list of how he would prefer to spend his Saturday afternoon. Unfortunately a thunderstorm caused the cricket match and the town parade to be cancelled. Sam went to the cinema. What was the opportunity cost of going to the cinema?

• going to a cricket match

• 1. watching the annual town parade

• 1. visiting relatives

• 1. losing his Saturday free time