Economics Quiz

Which statement is correct?

• Economic goods are not scarce.

• Economic goods have no opportunity cost.

• Free goods are scarce.

• Free goods have no opportunity cost.

The economy of country X is always on its production possibility curve (PPC). When will the goods and services produced by country X become more scarce?

• PPC shifts left, population size increases.

• PPC shifts right, population size unchanged.

• PPC unchanged, population size decreases.

• PPC unchanged, population size unchanged.

What is capital?

• The ability to organise the factors of production.

• The energy used in production.

• The factory used in production.

• The money invested in a firm.

What are features of a market economy?

• Private ownership of factors of production: no, Public ownership of factors of production: no, Government allocation of production: yes.

• Private ownership of factors of production: no, Public ownership of factors of production: yes, Government allocation of production: yes.

• Private ownership of factors of production: yes, Public ownership of factors of production: no, Government allocation of production: no.

• Private ownership of factors of production: yes, Public ownership of factors of production: yes, Government allocation of production: yes.

Public transport and cars are substitute goods. The price of public transport rises. What will happen to the demand for cars?

• It will contract.

• It will extend.

• It will decrease.

• It will increase.

The markets of four products are all in equilibrium. The table gives the value of the price elasticity of supply (PES) for each product. The demand for each product shifts to the right by 5000 units at all prices. Which product will have the largest price increase?

• 0

• 0.6

• 1.0

• 2.5

What is the value of the price elasticity of demand (PED) for a product if total revenue remains the same when the price is reduced?

• zero

• between 0 and 1

• greater than 1

• 1

The owner of a hotel in Malaysia finds that the price elasticity of demand (PED) for accommodation in the area is –1.7. If the hotel owner decreases the price of a room by 5%, how would the demand for a room change?

• It would decrease by 2.9%.

• It would decrease by 8.5%.

• It would increase by 2.9%.

• It would increase by 8.5%.

Good weather results in an increase in the demand for tomatoes. It also increases the supply of tomatoes. What must be a result of this?

• The price of tomatoes will fall.

• The price of tomatoes will rise.

• The quantity of tomatoes traded will fall.

• The quantity of tomatoes traded will rise.

What causes a change in the price of a product in a free market economy?

• changes in demand and supply conditions

• changes in external costs and external benefits

• changes in government decisions

• changes in the quantity of public goods