Theme 1 Econ

In Economics we construct models to represent real world situations. What do we assume?

• Ceteris paribus

• Everything else changes

• Quinitus est in horto

• Grumio est in cubiculum

Arsenal are the best football team in the world. What type of statement is this?

• Positive

• Normative

• Scientific

• Objective

In which of the following situations would a PPF shift inward?

• Increased spending on capital goods

• Falling unemployment

• Emigration of workers

• Rise in underemployment

Which of the following causes a fall in producer surplus?

• Rise in incomes

• Fall in indirect taxation

• Rise in the price of the sub good

• Rise in the price of the complementary good

The quantity demanded for one good rises significantly when the price of another good rises. What XPED would the two goods have?

• +0.4

• -3.3

• -0.6

• +4.4

A YED value of -0.5 tells us what?

• Inferior inelastic

• Inferior elastic

• Normal elastic

• Normal inelastic

Which of the following characteristics causes the free rider problem?

• Non-rival

• Non-rejectable

• Non-excludable

• Non-binary

Which of the following is not a benefit of pollution permit schemes

• Tax revenue

• Price mech

• Polluter pays

• Incentive to invest in green tech

Which of the following is not a function of the price mech?

• Incentives

• Rationing

• Signaling

• Forecasting

Which of the following curves do you not find on a positive externality diagram?

• MPC

• MPB

• MSB

• MPS