F.3 Economics Quiz

Which of the following can explain the relationship between scarcity and choice?

• Even if there is no scarcity, we still need to make choices.

• If there is no choice, there is no scarcity.

• If there is no scarcity, we do not need to make choices.

• All of the above

Opportunity cost is

• the highest-valued option forgone

• the price we pay for a good.

• the total expenditure on a good.

• all alternatives forgone in making a choice.

David won $0.3 million in a lucky draw. The following show how he prefers to spend the money:

1st preference: Make a down payment on a new flat

2nd preference: Buy a sports car

3rd preference: Buy a diamond watch

The opportunity cost of making a down payment on a new flat is________________

• a sports car.

• a diamond watch.

• a sports car and a diamond watch.

• zero, because the money was won in a lucky draw.

Mr Lee has a flat in Shenzhen.

If the rental rate of the flat in Shenzhen increases, how does it affect his cost of living in the flat?

• Decrease

• Increase

• Remain unchanged

An economic good MUST be a good

• people do not want more.

• not free-of-charge.

• sold in the market.

• whose quantity available is insufficient to satisfy all people’s wants.

If a good is a ‘free good’ in economics, we would expect that

• there must be an unlimited supply of the good in the market.

• nobody wants the good.

• people queue for the good.

• the quantity available of the good is sufficient to satisfy all human wants.

The law of demand states that:

The higher the price, the ________________ the ________________, other factors being constant.

• higher ; quantity demanded

• lower ; quantity demanded

• higher ; quantity supplied

• lower ; quantity supplied

Based on the above information, which of the following statements is true?

• The equilibrium price is $15 per unit.

• The equilibrium quantity is 15 units / period.

• At a price of $1, there is a surplus.

• At a price of $3, there is a shortage.

It is the supply-demand diagram of a market.

If the price is set at P1, then

• there is a shortage.

• sellers can sell the quantity they are willing and able to sell.

• demand is greater than supply.

• there is a surplus.

When the market for a good is in equilibrium,

• the price of the good will never change.

• there is no excess demand for the good.

• there is no excess supply of the good.