Economics Quiz 2009 (Complete)

What is necessary before capital can be created in an economy?

• Saving and investment

• Interest rates must be low

• The circular flow of income must be in equilibrium

• There must be more consumption and less saving

When is a firm most likely to maximise profits?

• When growth of the firm is at a maximum

• When the firm has a majority share of the market

• When the firm’s share price is at its highest

• When there is the greatest positive difference between total revenue and total cost

The following table shows a hypothetical demand schedule. What is the price elasticity of demand for this product over the price range $20 to $25?

• Zero price elasticity

• Unit price elasticity

• Price inelastic

• Price elastic

The following table shows labour market statistics for a hypothetical economy. What is the unemployment rate in this economy?

• 50%

• 5%

• 3.12%

• 5.26%

What is a major function of the Reserve Bank of Australia?

• The conduct of monetary policy

• The prudential supervision of banks

• The regulation of the share market

• The supervision of non bank financial intermediaries

Which of the following would enable the Australian government to achieve a more equitable distribution of income in the economy?

• The operation of automatic stabilisers

• Achieving a budget surplus

• The use of monetary policy

• The use of progressive taxation and transfer payments

What would cause a movement from A to B?

• A successful advertising campaign to eat more beef

• Lower production costs in the cattle industry

• Producer expectations about lower prices for beef in the next 12 months

• An increase in the number of beef farms affected by drought

Which of the following policy options would stimulate the level of economic activity in an economy?

• A surplus budget and a reduction in the cash rate

• A deficit budget and an increase in the cash rate

• A surplus budget and an increase in the cash rate

• A deficit budget and a decrease in the cash rate

The following diagram shows a firm’s long run average cost curve (LRAC). If a firm increases output from H to A, which of the following situations is it experiencing?

• Internal economies of scale

• Internal diseconomies of scale

• External economies of scale

• External diseconomies of scale

What market structure is characterized by many firms in the industry and a differentiated product?

• Oligopoly

• Monopolistic competition

• Monopoly

• Perfect competition