1) Which of the following is an example of a positive economic statement? a.Parliament should stabilise the social security system by raising taxes now.

b.A central bank should not print too much money because inflation could result. c.A healthy economy should grow at about 5 per cent a year to provide enough goods for a growing population.

d.The economy's real output increased at about 3 per cent last year and the unemployment rate decreased.

2) Compare two economies, Australia and Japan, which start out with identical production possibilities curves. Economy Australia chooses an efficient point with six consumption goods and three capital goods, while economy Japan chooses an efficient point with four consumption goods and five capital goods. We can predict that, in the future: a.economy Australia will grow faster than economy Japan b.economy Australia will operate inefficiently c.economy Japan will grow faster than economy Australia d.economy Japan will operate inefficiently

3) Suppose a new legislation is introduced and car producers have to pay higher wages to their workers. What will be the effect on the car market? a.Price will increase and quantity demand will decrease. b.Price will increase and demand for cars will decrease. c.Price will increase and quantity supply will increase. d.Price will decrease and quantity will increase.