What is the effect in the fertiliser market of an increase in the demand for electricity?

The price of fertiliser rises and the quantity supplied rises.

The price of fertiliser falls and the quantity demanded rises.

The price of fertiliser falls and the quantity supplied falls.

The price of fertiliser rises and the quantity demanded falls.

Which argument has often been used to justify the privatisation of state enterprises?

Private firms can produce the same outputs using fewer inputs.

Private firms try to earn large profits.

State enterprises are always monopolies which exploit consumers.

State enterprises cannot operate without government subsidies.

What is likely to be a long-run consequence if the maximum is set below the current free market level?

a shortage of applicants for rented housing

an increase in supply to satisfy the increased demand for rented housing

an increase in the number of houses being rented

What would be categorised as direct government provision of goods and services?

a government takeover of a local bus service

a government grant to a firm to provide healthcare services

a government regulation on the amount of sugar in soft drinks

a government subsidy to a firm that operates a regional train service

What is an example of a transfer payment?

the payment of student grants by the government

a household moving savings from one bank account to another

a monthly repayment on a loan used to buy a new cooker

the amount paid to transport goods from one city to another

What will lead to an immediate improvement in the balance of payments deficit on current account?

a reduction in dividend payments to foreign investors

a reduction in the standard rate of income tax

an increase in the level of government current expenditure

An appreciation of the South African rand in the foreign exchange markets is most likely to assist the South African government achieve which policy objective?

a reduction in the rate of inflation

a reduction in the volume of imports

an increase in the level of employment

What is likely to decrease as a consequence?

the value of the country’s currency

exports of capital from the country

the level of employment in the county

the prices of imports into the country

How were these activities recorded in the US balance of payments for 2018?

capital account credit, current account credit

capital account credit, current account debit

capital account debit, current account credit

capital account debit, current account debit

Which statement describes disinflation?

a fall in the rate of inflation

What is necessary to achieve this increase in output in the economy?

enough capacity to produce the extra goods and services demanded

free trade to allow imports to make up any shortages in supply

What is necessary to achieve this increase in output in the economy?

enough capacity to produce the extra goods and services demanded

free trade to allow imports to make up any shortages in supply

government spending to be less than tax revenue

reduced credit to lower inflation

Under which conditions is the deficit most likely to improve?

price elasticity of demand for exports

price elasticity of demand for imports

income elasticity of demand for imports

What is an example of fiscal policy aimed at increasing aggregate demand in an economy?

reducing the rate of income tax for all income earners

increasing expenditure by firms on skills training programmes for unskilled workers

increasing the commercial banks’ lending ability

reducing the rate of interest on loans to manufacturing companies

Which policy measure will enable it to maintain its exchange rate?

decreasing government borrowing

What distinguishes the very long run from the long run?

the ability to change the state of technology

the ability to change resource allocation

the absence of government market intervention

the existence of variable factors of production

Which statement is a positive statement?

The distribution of income and wealth in most western European countries is unequal.

The government ought to increase income tax on high earners.

There should be more legal rights given to workers to protect their status in the workplace.

Wages of those on low incomes should be increased.

What could not cause a shift in an individual’s demand curve for good Z?

a change in advertising expenditure on Z

a change in the individual’s income

a change in the individual’s tastes

What will happen as a result?

a reduction in farmers’ revenue equal to PRSP1

expenditure on sugar will be equal to PRMO

farmers’ revenue would be P1UNO

What could explain the change from period 1 to period 2?

an increase in the price of a substitute

an increase in the price of a complement

the imposition of a minimum price of 60 cents by a government

the imposition of an indirect tax on suppliers

Which example of consumer behaviour would create consumer surplus?

when a consumer pays less than they are willing to pay for a good

when a consumer does not spend all of her income each month

when a consumer throws away vegetables because they bought too much

when a good is purchased in order to resell it at a higher price

Which immediate action should be taken to maintain the equilibrium price of P?

use existing stocks of wheat to increase supplies by 20 million tonnes

grant a subsidy to farmers equivalent to PP1

impose an indirect tax equivalent to PP2

plant more wheat to increase supplies to 40 million tonnes

What is used to calculate the price elasticity of demand?

percentage change in quantity demanded/percentage change in price

change in price/change in quantity demanded

change in quantity demanded/change in price

percentage change in price/percentage change in quantity demanded

What would be a consequence of this policy?

The market would fail to clear leaving a surplus of cereals.

Both rich and poor people would satisfy their demands equally.

Illegal buying and selling through a black market would be prevented.

Rationing would be necessary to ensure a fair distribution of cereals.

What would be a transfer payment?

the payment made to a retired person in the form of a pension

the payment made by a company to its shareholders out of its profits

the payment made for a legal document to transfer ownership of a house

the payment made to a professional sports team for the transfer of a player

Why is national defence provided by the government?

In a free market it is non-excludable and non-rival in consumption.

In a free market it is excludable and rival in consumption.

The government has perfect information, so it can set the correct quantity required.

The private sector firm would charge a high price for its use as it is a necessity.

Which statement about a rise in the general price level in a country is correct?

It is likely to create economic winners and losers in the country.

It is never acceptable to modern governments.

It means that no goods have fallen in price.

It must make the average citizen poorer.

What is most likely to have caused this change?

a depreciation of the country’s currency

a rise in the price of exported goods

an improvement in the balance of trade

Which statement is correct?

Its central bank would have to intervene more frequently in the foreign exchange market.

Its central bank would need to hold fewer foreign currency reserves.

The value of its currency would be determined by its major trading partners.

The value of its currency would be determined by the value of the US dollar.

What will be the immediate effect of a devaluation of an economy’s foreign exchange rate?

The price of imported goods in the domestic currency will fall.

The price of imported goods in the domestic currency will rise.

What will be the immediate effect of a devaluation of an economy’s foreign exchange rate?

The price of imported goods in the domestic currency will rise.

The price of imported goods in the domestic currency will fall.

The price of imported goods in the foreign currency will fall.

The price of imported goods in the foreign currency will rise.

A country has a deficit on the current account of its balance of payments. What might help the country to reduce its deficit?

an increase in its level of employment

a decrease in its rate of income tax

an increase in its subsidies to exporters

Which item should be recorded in the financial account of a country’s balance of payments?

investments by Middle Eastern oil producing countries through the purchase of land and property assets in Europe

foreign aid by China to assist in infrastructure projects in African countries

payments by the USA to other countries which house American military bases

profits and dividends paid by multinational companies based in Indonesia to shareholders in Asia

Economics Quiz

Authored by WILLY SICHONE

Business

12th Grade

Used 1+ times

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77 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What explains the shape of the production possibility curve?

Coconuts and fish are perfect complements.

Coconuts and fish are perfect substitutes.

The inhabitants consume more fish than coconuts.

The opportunity cost of increasing fish production is constant.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the opportunity cost of visiting the museum?

$40

$80

$120

$160

MULTIPLE SELECT QUESTION

30 sec • 1 pt

Which type of economic statement is illustrated by each comment?

normative

positive

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which change in the way resources are allocated in an economy is consistent with moving from a planned economy to a market economy?

A minimum price guarantee for apple producers is removed.

A new government authority is established to monitor inefficiencies in apple production.

The production of apples is subsidised to increase output.

The sale of apples has a maximum price imposed.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In which circumstance will the total expenditure by consumers on a good increase when its price increases?

Demand for the good is income elastic.

Demand for the good is price inelastic.

The price of a complementary good also increases.

The price of substitute goods also increases.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When will a manufacturer’s ability to increase the quantity supplied in the short run be greater?

when labour is immobile

when spare capacity exists

when the product is perishable

when unemployment is low

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What must be correct when the free market for a good is in disequilibrium?

Consumers can buy all of the good that they demand at the market price.

Producers can sell all of the good that they supply at the market price.

The market price of the good will not change.

The quantity of the good demanded differs from the quantity supplied.

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Economics Quiz

What explains the shape of the production possibility curve?

What is the opportunity cost of visiting the museum?

Which type of economic statement is illustrated by each comment?

Which change in the way resources are allocated in an economy is consistent with moving from a planned economy to a market economy?

In which circumstance will the total expenditure by consumers on a good increase when its price increases?

When will a manufacturer’s ability to increase the quantity supplied in the short run be greater?

What must be correct when the free market for a good is in disequilibrium?

What is the effect in the fertiliser market of an increase in the demand for electricity?

What is the new equilibrium price?

What happens to the value of price elasticity of demand (PED) when there is a movement from point X to point Y and what describes the value at point Y?

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