Economics Quiz

When an increase in the price of good A causes an increase in demand for good B, the goods are

• normal

• complements

• inferior

• substitutes

Which of the following is NOT part of the opportunity cost of attending university?

• The tuition fees that you or your government pays.

• The alternative uses of the time you spend studying.

• The income that you could have earned if you did not attend university.

• The cost of the food that you consume while you are attending university.

Inferior goods are best defined as

• goods whose supply falls as people's income rises.

• goods that only those who are relatively poor purchase.

• goods whose demand falls as people's income rises.

• goods that have higher-quality alternatives.

Expectations about price changes will affect

• both the demand and supply curves.

• the demand curve only.

Which of the following might shift the demand curve for butter to the right?

• A decrease in the price of margarine, a substitute

• A decrease in the price of butter

• An increase in income

• An increase in the price of bread, a complement

A movement upward along the demand curve to the left could be caused by

• A rise in inflation.

• A fall in the price of substitutes.

• A rise in income.

• A decrease in supply.

Which of the following will cause a shift in a supply curve?

• An increase in the ability/productivity of the firm’s workforce.

• A change in hourly wage costs.

• A change in the profitability of alternative products.

• All of the above

Which of the following correctly describes how price adjustments eliminate a shortage?

• As the price rises, the quantity demanded will increase while the quantity supplied will decrease.

• As the price falls, the quantity demanded will decrease while the quantity supplied will increase.

• As the price rises, the quantity demanded will decrease while the quantity supplied will increase.

• As the price falls, the quantity demanded will increase and the quantity supplied will also increase.

The following table shows the demand and supply schedules for good X. Assume that supply increases by 40 units at all prices. What will be the effect on equilibrium price?

• Fall by £1

• Rise by £1

• Rise by £2

• Fall by £2

Suppose that it is observed that the price of wheat falls, and that the quantity sold also falls. From this we can deduce