9708/12/F/M/23

A good is most suitable to be provided by the market if it is:

• excludable and non-rival.

• excludable and rival.

• non-excludable and non-rival.

• non-excludable and rival.

What is the definition of long run?

• the time period when all factors of production are specialised

• the time period when all factors of production are variable

• the time period when all key inputs into production are variable

• the time period when at least one factor of production is fixed

The table states the consequences of two macroeconomic policies. What correctly identifies whether the statements are normative or positive?

• normative, normative

• normative, positive

• positive, normative

• positive, positive

What can be deduced from the production possibility curve for wheat and corn shown in the diagram?

• As the price of corn falls, more of it is demanded.

• Resources used in producing corn are more efficient than in producing wheat.

• The opportunity cost of producing corn falls when moving from M to N.

• The opportunity cost of producing corn is constant when moving from M to N.

Which price rise would cause the quantity supplied to double if the supply curve is represented by the equation quantity supplied = 10 + 5P?

• $1 to $2

• $1 to $3

• $1 to $4

• $1 to $5

Which diagram illustrates unitary elasticity of supply?

• Diagram A

• Diagram B

• Diagram C

• Diagram D

In which case is the price system not a possible method of allocating resources?

• A) In the distribution of foodstuff among the population

• B) In the hiring of workers by employers

• C) In the ownership of land for agricultural use

• D) In the provision of public goods by the government

A sports stadium has two prices of seats. The cheaper seats are $10 and the more expensive

seats are $20. When the prices of all seats are increased by 10%, the effects on demand are a

fall of 5% for the cheaper seats and a fall of 12% for the more expensive seats.

What describes the responsiveness of demand to the change in price for cheaper and more expensive seats in a sports stadium?

• A) Elastic for cheaper seats, Inelastic for more expensive seats

• B) Elastic for cheaper seats, Inelastic for more expensive seats

• C) Inelastic for cheaper seats, Elastic for more expensive seats

• D) Inelastic for cheaper seats, Unitary elasticity for more expensive seats

Which statement correctly describes the shape of the demand curve for a normal good?

• A) It shows an inverse relationship between income and quantity demanded.

• B) It shows an inverse relationship between the price of the good and quantity demanded.

• C) It shows a positive relationship between the price of the good and quantity demanded.

• D) It shows a positive relationship between income and quantity demanded.

Why does the basic economic problem of scarcity apply to both the rich and the poor?

• A) The choices people make are not dependent on income inequalities.

• B) Consumers pay the same prices for goods and services to satisfy their wants.

• C) Human wants exceed what can be produced from available resources.

• D) Natural resources are unevenly distributed amongst nations.