2. Economics Quiz pp11-33

What is one of the advantages of specialisation in trade?

• It decreases competition.

• It limits the choice of goods.

• It enables higher living standards and more competition.

• It requires countries to produce every good they need.

Which of the following is a problem of specialisation in trade?

• It diversifies the economy.

• It makes an economy vulnerable if it relies on a small number of goods.

• It increases income elasticity of demand for primary products.

• It allows for the growth of a varied car industry in African countries.

What does the term 'market' refer to ?

• A place where only agricultural products are sold.

• The process of determining the price and quantity of goods sold.

• A specific location where goods are exchanged for services.

• The storage area for goods before they are distributed.

What do we assume about firms and consumers in economics?

• They make decisions to minimise their economic welfare.

• They are irrational and make random decisions.

• They try to maximise their economic welfare and make decisions to enable this.

• They are only interested in short-term gains.

What is 'utility'?

• The cost of consuming a good.

• The amount of money spent on goods.

• The benefit people get from consuming a good.

• The profit a firm makes from selling a good.

What is the primary assumption about firms in terms of profit?

• Firms aim to break even between total revenue and total costs.

• Firms are expected to operate at a loss in the long run.

• Firms wish to maximise profit, either in the short run or long run.

• Firms focus on cutting costs without regard to profitability.

What does the individual demand curve illustrate?

• The quantity of a good the government is willing to supply.

• The price people are willing to pay for a particular quantity of a good.

• The amount of a good a company is willing to produce.

• The price at which a good is sold in the market.

What does the market demand curve represent?

• The price at which a market clears all its goods.

• The price suppliers are willing to accept for their goods.

• The price consumers in the whole economy are willing to pay.

• The total quantity of goods demanded at a certain price level.

What happens to demand when the price of a good increases?

• Demand remains constant.

• Demand increases.

• Demand decreases.

• Demand fluctuates unpredictably.

What is the effect of a lower price on the demand for a good?

• It has no effect on demand.

• It decreases demand.

• It increases demand.

• It varies depending on the good.