9708/11/M/J/24 Economics Quiz

A worker earns $40 per hour. Rather than work, she decides to visit a museum for three hours. The visit costs a total of $40. What is the opportunity cost of visiting the museum?

• $40

• $80

• $120

• $160

The nature of a typical car assembly plant has changed. The industry has fewer firms, operates on larger sites and has more automated machinery. How is this change most likely to have affected the relative use of factors of production in the industry?

• capital and enterprise; labour and land

• enterprise and labour; land and capital

• labour and land; capital and enterprise

• land and capital; enterprise and labour

Which item would be least likely to be classed as land?

• fertilisers

• fisheries

• forests

• coal

Why does the concept of scarcity apply to the use of fossil fuels?

• Demand fluctuates according to price changes.

• Supply is insufficient to meet demand.

• Their use is restricted because of harmful pollution.

• They are being replaced by renewable energy sources.

An economist knows the current point at which an economy operates within its production possibility curve. What can the economist conclude about this economy?

• its degree of self-sufficiency

• its international competitiveness

• its level of output of two goods

• its rate of economic growth

An increase in which factor is likely to cause a shift to the left of the demand curve for cinema movies?

• expenses for the heating system in the cinema

• payments charged by movie scriptwriters

• the cost of transport to the cinema

• taxes on the incomes of cinema operators

Four firms supply the market. The market supply is 50 units at $20 and 100 units at $40. The table shows the market share of each firm at the two prices. Which firm does not have a normal upward-sloping supply curve?

• A

• B

• C

• D

Which statement is correct?

• Demand for an inferior good has a positive relationship to income and a negative relationship to price.

• Demand for an inferior good has a negative relationship to income and a negative relationship to price.

• Demand for a normal good has a positive relationship to income and a positive relationship to price.

• Demand for a normal good has a negative relationship to income and a positive relationship to price.

In which row are both statements correct?

• Consumer surplus: the value that consumers gain from consuming a good over and above the value that would have been gained from consuming the next best alternative; Producer surplus: the difference between the actual revenue received by firms for a good and the profit maximising revenue

• Consumer surplus: the value that consumers gain from consuming a good over and above the price paid; Producer surplus: the difference between the price received by firms for a good or service and the price at which they would have been prepared to supply that good

• Consumer surplus: the value that consumers gain from consuming a good over and above the price paid; Producer surplus: the difference between the actual revenue received by firms for a good and the profit maximising revenue

• Consumer surplus: the value that consumers gain from consuming a good over and above the value that would have been gained from consuming the next best alternative; Producer surplus: the difference between the price received by firms for a good and the price at which they would have been prepared to supply that good

A firm calculates that the income elasticity of demand for its product is –3.0. What can be deduced from this information?

• In a period of economic growth, its total revenue should increase.

• In a period of economic recession, its total revenue should increase.

• It has few substitutes so it should increase its price to increase total revenue.

• It has many substitutes so it should decrease price to increase total revenue.