During last year the price of petrol in Sydney increased 11.0 per cent. If the price elasticity of demand for petrol was 0.13, the price increase means that the quantity demanded decreased by:

Select one:

A.1.43 per cent.

B.6.46 per cent.

C.4.31 per cent.

D.0.16 per cent.

E.8.46 per cent.

Car insurance and cars are complements. If the price of car insurance increases, the:

Select one:

A.demand for cars increases.

B.demand for cars decreases.

C.quantity of cars demanded increases.

D.quantity of cars demanded decreases.

E.More information is needed to determine if the demand for cars increases or decreases.

If the number of people in the labour force ________, then ________.

Select one:

A.increases; the unemployment rate definitely increases

B.decreases; the labour force participation rate increases

C.decreases, the unemployment rate does not change

D.decreases; the unemployment rate definitely decreases

E.increases; the labour force participation rate increases

Each firm in a perfectly competitive industry:

Select one:

A.produces a good that is slightly different from that of the other firms.

B.has an important influence on the market price of the good or service being produced.

C.attains economies of scale so that it's efficient size is large compared to the market as a whole.

D.produces a good that is identical to that of the other firms.

E.has control over at least one unique resource to separate itself from its competitors.

The Coase theorem states that:

Select one:

A.the best way to limit pollution is by taxing producers who pollute.

B.if property rights exist and transactions costs are low, private transactions are efficient.

C.profit-making producers pollute because they are forced to.

D.the level of pollution should be equal to zero to maximise social net benefit.

E.the efficient level of output is where marginal external cost equals marginal external benefit.