2017 Multi choice

Production Possibility Frontier AB has changed to AC. This is most likely to have been caused by:

• War breaking out leading to a reallocation of resources towards military goods

• Destruction of factories during wartime

• An increase in productivity in the military goods industry

• A population increase

• A decrease in the number of agricultural goods produced

Which of the following is a withdrawal from the circular flow of income of an economy?

• Spending on imports

• Spending on exports

• Consumption

• Welfare payments to households

• Investment

The largest component part of aggregate demand in the UK is:

• Spending on imports

• Spending on exports

• Consumption

• Welfare payments to households

• Investment

The correct figure for X is:

• 88

• 100

• 108

• 110

• 188

The correct figure for Y is:

• £1.15

• £1.03

• 98p

• 95p

• 92p

Which of the following is an example of investment in the economic sense?

• A bank deposit account

• Building a new factory

• Buying a house

• Buying gold and silver

• Saving money

An increase in the level of investment in an economy will not lead to:

• An increase in aggregate demand

• A shift outwards of the production possibility frontier

• Improvements in productivity

• A shift leftwards of aggregate supply

• A fall in the costs of production

A professional rugby players’ union negotiates a contract that dramatically increases all players’ salaries. How would this influence the opportunity cost for a player who was considering giving up rugby to pursue a career in television and radio broadcasting?

• It would increase the opportunity cost of continuing to play rugby

• It would increase the opportunity cost of becoming a broadcaster

• It would decrease the opportunity cost of becoming a broadcaster

• It would not affect the opportunity cost of playing rugby or broadcasting

• It cannot be determined from the given information

Calculate producer surplus before the imposition of the maximum price at £5.

• £2000m

• £1200m

• £1000m

• £800m

• £600m

Calculate consumer surplus after the imposition of the maximum price at £5.

• £2000m

• £1200m

• £1000m

• £800m

• £600m