11.

A firm's total cost is $10,957 when it produces a quantity of 50.Rounded to the nearest dollar, what is the firm's average total cost at this quantity?

a.413b.250c.219d.187e.none of the above

A

B

C

D

E

12.

Wendy sells motor homes in the retail market.She buys the motor homes from the manufacturer for a cost that does not vary with the number she purchases. She can sell six per week at $20,000 each. If she limits sales to five, she can charge $21,000 each. She will sell six per week if the cost of buying each motor home from the manufacturer is no more than

a.$20,000b.$10,000c.$15,000d.$21,000e.$30,000

A

B

C

D

E

13.

Suppose the price elasticity of demand for a product is infinite. This means that:

a.if you increase the price 1%, revenues will increase.b.if you increase the price 1%, revenues will stay the same.c.if you increase the price 1%, revenues will fall to zero.d.if you increase the price 1%, profit will increase.e.none of the above

A

B

C

D

E

14.

Which of these would cause a leftward shift of the demand for tongue piercings?

a.a tongue ring fadb.discovery that tongue piercings can lead to infectionsc.lower price of tongue ringsd.higher incomes among young peoplee.higher wages for tongue piercers

A

B

C

D

E

15.

In a market-based economic system, the use of scarce resources

a.occurs in an essentially random manner.b.is determined primarily by consumer demand.c.does not respond to changes in preferences.d.is fixed by the appropriate government agency.e.depends entirely on the whims of wealthy capitalists.

Explain the economic problem of scarcity. [3 marks]

Define the concept of opportunity cost. [3 marks]

Distinguish, using examples, between the different factors of production. [6 marks]

Discuss whether a country should conserve or use its natural resources. [8 marks]

Explain, using examples, what is meant by the factor of production called land. [3 marks]

Describe the nature of the economic problem. [4 marks]

Using a production possibility curve, explain what is meant by opportunity cost. [6 marks]

What is the difference between labour and enterprise [4 marks]

Using a production possibility curve diagram, analyse the effect of a decrease in the supply of labour and enterprise on an economy. [5 marks]

Explain why prices tend to be relatively stable in a non-collusive oligopoly.