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WorksheetsNEC training 2
Total questions: 36
Worksheet time: 2hrs 48mins
The diagram shows the production possibility curve (PPC) of a country producing at point T.
The country has an ageing population and decides to allocate more resources to the production of health services. Which movement shows this change in resource allocation?
T to S
T to U
T to V
T to W
A country experiences a long strike by railway workers. What would be the macroeconomic impact of such a strike?
National output would fall
Railway workers would lose income.
The demand for taxi services would rise.
The profits of railway operators would fall.
What necessarily describes the market system?
an economy with both a private and public sector
limited resources but unlimited wants
resources are allocated through demand and supply
when all resources are used to produce consumer goods
What is a trade union?
a business organisation in which all workers share ownership
an area where there are no barriers to trade
an organisation of employers from an industry
an organisation that represents the interests of workers
In some industries, a monopoly controls output and prices.
What is the most likely impact of this on consumers?
higher prices
higher profits
higher taxes
more choice
What is a monetary policy measure?
increasing interest rates
increasing taxation
reducing the power of trade unions
selling state-owned enterprises
Why does more emphasis on education and training lead to an increase in national output?
It improves the productivity of the labour force.
It lowers the inputs of capital investment.
It reduces demands for higher pay.
It reduces the power of trade unions.
In the past, governments have adopted policies to try to end a recession in their country and increase economic growth.
Which combination of policies is most likely to achieve this?
lower taxes and decrease government spending
lower taxes and increase government spending
raise taxes and decrease government spending
raise taxes and increase government spending
The table provides information about a country’s labour market.
What is the unemployment rate of this country?
15%
25%
50%
75%
A person receives annual interest of 4% on their savings. Inflation is 5% per annum. What is the approximate change in the real value of their savings?
-5%
-1%
1%
4%
An increase in which of the following is least likely to cause inflation?
consumer spending
government spending
income tax
wages
What is the function of the factors of production in an economy?
to make goods and services to fulfil wants and needs
to provide an even distribution of income
to provide tax income for the government
to reduce the existence of external costs
The diagram shows a production possibility curve (PPC) for an economy that can produce cotton and cars. The economy is at point Q.
There is improved technology that can only be used in the production of cars.
How would this be represented on this diagram?
by a movement from Q to W
by a movement from Q to X
by a movement from Q to Y
by a movement from Q to Z
Which topic is included in microeconomics?
economic growth
elasticity of demand
inflation
the balance of payments
The diagram shows market demand and supply curves.
To what extent is the market in disequilibrium at price P3?
OQ1 – OQ2
OQ1 – OQ3
OQ2 – OQ4
OQ3 – OQ5
Lithium is an essential metal for the production of electric cars. Following a 10% increase in the price of lithium, supplies increase by 15%. This led to a 5% increase in the price of electric cars.
What is the price elasticity of supply (PES) for lithium?
0.33
0.66
1.50
2.0
The graph shows women’s wages as a percentage of men’s wages in year 1 and year 2.
Which statement is shown by the graph to be true?
Younger women earn more than older women.
Women’s wages remain about the same between the ages of 40–50.
In year 2, all women were earning more than men.
In year 2, women were earning a higher percentage of men’s wages than in year 1.
How is a government most likely to prevent the growth of monopolies?
by encouraging mergers in the private sector
by establishing nationalised industries
by promoting the benefits of economies of scale
by reducing barriers to entry into an industry
The government wishes to increase economic growth in its economy.
What would not be likely to achieve this aim?
The central bank encourages bank lending.
The central bank lowers interest rates.
The government increases sales tax (VAT).
The government subsidises new industries.
What may directly cause economic growth?
higher imports
higher levels of resources
higher taxation
higher unemployment
What distinguishes a more developed country from a less developed country?
Inflation rates are higher in the more developed country.
Interest rates are higher in the more developed country.
Natural resources are higher in the more developed country.
Real incomes are higher in the more developed country.
From an economic point of view, which approach to controlling pollution is most efficient?
Abolish the use of toxic chemicals in all production.
Use economic resources to eliminate all pollution.
Adopt laws and regulations that prohibit economic activities that cause pollution.
Reduce pollution as long as the additional benefits are greater than the additional costs.
The demand for a product becomes more inelastic as the product
has fewer substitutes, is a luxury, and takes a smaller share of the consumer's income.
has fewer substitutes, is a necessity, and takes a smaller share of the consumer's income.
has fewer substitutes, is a necessity, and takes a larger share of the consumer's income.
has more substitutes, is a necessity, and takes a larger share of the consumer's income.
Which of the following describes a negative externality or external cost ?
The benefits of a public good go to those who do not pay for the good.
A consumer purchases a good but then decides to give it to someone in another country.
The costs of producing a good are borne by those other than the producer or consumer of the good.
The price of producing a good is less than the marginal benefit of consuming the good.
The demand curve faced by a perfectly competitive firm for the good it sells is:
downward sloping
upward sloping
perfectly horizontal
perfectly vertical
Use the table, showing a firm's short-run cost information, to answer the following question. The average variable costs of producing 3 units of output are
$6
$4
$2
$12
Which of the following might have caused the rotation shown in the above production possibilities frontier?
The invention of the reaper-used in wheat production.
The invention of the cotton gin-used in cotton production.
The invention of fertilizer-used in the production of both wheat and cotton.
The proliferation of wheat rust-a fungal disease that threatens wheat production.
The following table depicts the level of labor and production for a firm making shirts. Once ______ workers are hired, diminishing marginal product begins.
1
2
3
4
Which of the following is an implicit cost?
Salaries paid to workers who work for the firm.
Interest on money borrowed to finance equipment purchases.
Cash payments for raw materials.
Foregone rent on office space owned and used by the firm.
Which of the following questions would not be of particular interest to a microeconomist?
Why do national economies grow?
What percentage of consumer income is spent on entertainment?
Why do workers refer the 4-day workweek?
What happens to worker productivity when the job shifts to a 4-day workweek?
What primary function is money serving when it is used to buy a ticket to a movie?
Store of value.
Flow of funds.
Unit of account.
Medium of exchange.
Gross domestic product (GDP) is a measure of
the price level of goods and services sold.
total spending by federal, state, and local governments.
the quantity of goods and services produced by private businesses.
the market value of the nation's output of final goods and services.
One reason the federal government might reduce taxes is to
slow the rate of inflation.
slow a rapid rise in interest rates.
decrease business spending on plant and equipment.
increase consumer spending and stimulate the economy.
Aggregate demand is
the relationship between the overall price level and the quantity demanded of aggregate output at a
particular time.
the relationship between price and the quantity that sellers demand.
a direct relationship between prices and output, given the interest rate.
the total amount of any particular good all consumers demand.
Changes in government spending and tax policy is known as:
monetary policy.
balanced budget policy.
fiscal policy.
discretionary policy.
What is not a factor of production?
a $20 banknote
an office
a photocopier
a secretary
