Economics Quiz

Assume that X bet £20 on the roll of a die. If the die lands with a six facing upwards, X wins £100; if any other number lands face-up, X loses £20. To an economist, X would be operating under

• uncertain conditions.

• conditions of risk.

• a black market.

• It is not possible to say from the information provided.

Which of the following is most likely to be a variable cost for a firm?

• The monthly rent on office space that it leased for a year

• The taxes that are paid on employee wages

• The franchiser's fee that a restaurant must pay to the national restaurant chain

• The interest payments made on loans

Which of the following is a fixed cost for a chocolate factory over the course of a month?

• The cost of electricity (paid quarterly) for running the mixing machines

• The cost of cocoa

• Depreciation of machines due simply to their age

• Overtime pays

You decide to go to college instead of working full-time. Which of the following is NOT considered part of the opportunity cost of your decision?

• The tuition fees you pay.

• The lost wages you could have earned while working.

• The cost of textbooks and course materials.

• The money you spend on groceries while in college.

When evaluating the true cost of attending university, economists consider all the following EXCEPT:

• The upfront cost of attending classes

• The income you could have earned working instead of studying.

• The social experiences and personal growth gained during college.

• The time commitment required for studying and attending classes.

As someone's income increases, they tend to buy less of good X. Good X is most likely classified as an:

• Normal good.

• Inferior good.

• Luxury good.

• Public good.

The demand for product A decreases as there’s a rise in income. This product would be considered a:

• Giffen good.

• Normal good.

• Inferior good.

• Substitute good.

The following table shows costs and revenue schedules for a firm.

How much total profit will the firm make at the profit-maximising level of output?

• £48

• £0

• £40

• £16

The value of the British pound (sterling) would likely depreciate if there is:

• An increase in the supply of sterling AND an increase in the demand for sterling

• A reduction in the supply of sterling OR a reduction in the demand for sterling

• An increase in the supply of sterling AND a reduction in the demand for sterling

• A reduction in the supply of sterling OR an increase in the demand for sterling