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WorksheetsECONOMICS TEST (CA FOUNDATION ELITE GROUP ✨)
Total questions: 35
Worksheet time: 26mins
Which of the following is NOT a determinant of demand?
Cost of production
Price of related goods
Income of the consumer
Price of the commodity
If the price of a substitute good increases, what will happen to the demand for the original good?
Increase
Decrease
Remain unchanged
May increase or decrease depending on the elasticity
When the price of a good decreases, what happens to its quantity demanded, ceteris paribus?
Increases
Decreases
Remains unchanged
Becomes elastic
Which of the following is a determinant of supply?
Consumer preferences
Population size
Technology
NONE
When there is a surplus in the market, what happens to the price and quantity traded?
Price increases, quantity decreases
Price decreases, quantity increases
Price decreases, quantity decreases
Price increases, quantity increases
Elasticity of demand measures:
The responsiveness of quantity demanded to a change in price
The responsiveness of price to a change in quantity demanded
The total demand in the market
The sensitivity of demand to income changes
When demand is perfectly inelastic, the price elasticity of demand is:
0
1
INFINITE
CANT BE DETERMINED
Which of the following factors does NOT influence the elasticity of supply?
Time period
Availability of substitutes in production
Ease of storing the product
Nature of the product
If the demand for a product increases and there is no change in supply, what will happen to the equilibrium price and quantity?
Price increases, quantity decreases
Price decreases, quantity increases
Price and quantity both increase
Price and quantity both decrease
What happens to the equilibrium price and quantity when both demand and supply increase?
Price increases, quantity decreases
Price decreases, quantity increases
Price increases, quantity increases
Price decreases, quantity decreases
If the price of a good increases by 10% and the quantity demanded decreases by 15%, what is the price elasticity of demand?
.67
1.5
2.5
0
If the price of a good decreases by 20% and the quantity demanded increases by 30%, what is the price elasticity of demand?
.60
1.5
1.3
2
If the price of a product increases by 8% and the quantity demanded decreases by 4%, what is the price elasticity of demand?
4
.5
1
2
If the price of a product increases by 6% and the quantity demanded decreases by 9%, what is the price elasticity of demand?
.67
.33
1.5
2.5
Which of the following is NOT a factor of production?
LABOUR
LAND
CAPITAL
MONEY
The short run is a period in which:
All factors of production are variable
All factors of production are fixed
Some factors of production are variable while others are fixed
None of the factors of production are available
The law of diminishing returns states that:
Total product increases at a decreasing rate as more units of a variable input are added to fixed inputs
Total product increases at an increasing rate as more units of a variable input are added to fixed inputs
Total product remains constant as more units of a variable input are added to fixed inputs
Total product decreases at a constant rate as more units of a variable input are added to fixed inputs
Which of the following cost concepts represents the cost of producing one additional unit of output?
Average cost
Total cost
Marginal cost
Fixed cost
When average cost is falling, marginal cost is:
Equal to average cost
Less than average cost
Greater than average cost
Unrelated to average cost
Total variable cost is the sum of:
Fixed costs and variable costs
Marginal costs and average variable costs
Average fixed costs and average variable costs
All costs that vary with the level of output
The long run average cost curve is U-shaped due to:
Increasing returns to scale
Decreasing returns to scale
Constant returns to scale
Diseconomies of scale
Economies of scale occur when:
Long-run average cost decreases as output increases
Long-run average cost increases as output increases
Long-run marginal cost decreases as output increases
Long-run marginal cost increases as output increases
When a firm experiences economies of scale, what happens to its production efficiency as output increases?
Increases
Decreases
Remains constant
Fluctuates randomly
Which of the following costs is incurred even when no output is produced?
Fixed cost
Variable cost
Marginal cost
Opportunity cost
Which phase of the business cycle is characterized by high levels of economic activity, low unemployment rates, and rising prices?
Expansion
Peak
Contraction
Trough
During a recession, what typically happens to consumer spending and business investment?
Both increase
Both decrease
Consumer spending decreases, while business investment increases
Consumer spending increases, while business investment decreases
What typically happens to inflation during the expansion phase of the business cycle?
Inflation rises
Inflation falls
Inflation remains constant
Inflation becomes negative
Fiscal policy refers to the government's use of:
Interest rates to influence economic activity
Money supply to control inflation
Taxation and government spending to stabilize the economy
Exchange rates to promote exports
Monetary policy refers to the central bank's use of:
Taxation to influence economic activity
Government spending to control inflation
Interest rates and money supply to stabilize the economy
Trade policies to regulate imports and exports
What is the primary goal of policymakers during a recession?
Stimulate economic growth
Control inflation
Reduce government spending
Increase taxes
The business cycle is characterized by:
Periodic and irregular fluctuations in economic activity
Steady and predictable economic growth
Continuous expansion without any downturns
Stable unemployment rates and prices
A company produces 100 units of a product at a total cost of $2000. If the company produces 120 units at a total cost of $2400, what is the average variable cost (AVC) per unit?
$16.67
$20
$25
$30
If the total fixed cost of a firm is $5000, and it produces 100 units of output at a total cost of $7000, what is the average fixed cost (AFC) per unit?
$50
$70
$100
$120
: A company produces 200 units of a product at a total cost of $6000. If the company experiences constant returns to scale, how much would it cost to produce 250 units?
$7000
$7500
$8000
$8500
Can you explain the answer of this question below: The average fixed cost for producing an output of 6 units of a product by a firm is Rs. 30. The same cost for producing an output of 4 units will be Rs. _________.
45
50
40
42.5
