Instructions: Select the correct response to all questions

1. Which of the following factors would most likely concern a macroeconomist?

• Demand and supply for a firm's products
• Changing consumer tastes and preferences
• Exchange rates
• Industry market structures

2. In which of the following industry type would the extraction of newly discovered crude oil in Guyana fall?

• Primary
• Secondary
• Tertiary
• Essential extracts

3. Which of the following is the only factor that causes a movement along the demand curve?

• A change in the price of substitutes and compliments
• A change in the price of the product itself
• A change in tastes and preferences
• Speculation in the market

4. How is an increase in price of wheat imports in Jamaica likely to affect the price and quantity of baked products supplied in the domestic market in the short run?

• Increase price and reduce quantity
• Increase price and increase quantity
• Increase price, ambiguous effect on quantity
• No effect on either price or quantity

5. Rational consumers will always seek to maximize which of the following quantities in markets?

• Total consumption
• Consumer surplus
• Profits
• Gross spending

6. Which of the following best describes the existence of market disequilibria in the short run?

• The existence of high prices
• Surpluses and shortages
• Unprofitable prices
• Too many firms in the industry

7.. If there is a change in taste and preference for milk in Jamaica due to new research which suggests that milk consumption promotes intelligence, while there is political turmoil in New Zealand, a key milk exporter to Jamaica, what is the likely overall effect on price and quantity in the short run in the domestic market?

• Price increases and quantity falls
• Price increases and quantity is ambiguous
• Price and quantity increases
• Price is ambiguous and quantity rises

8. If the calculated elasticity of demand for a product is 0.32, what types of elasticity does this product have?

• Unitary elasticity
• Relatively inelastic demand
• Relatively elastic demand
• Infinite elasticity

9. If the calculated elasticity of supply for a product is 1.23, what does this imply about the product?

• Supply is inelastic and therefore very unresponsive to a change in price
• Supply changes by the same percentage as the change in price
• Supply is highly elastic and therefore very responsive to a change in price
• Supply is constant across a range of prices

10. Which of the following best describes the long run adjustments in a market that corrects a surplus/excess supply that is caused by an outward shift of the supply curve?

• Price falls and quantity settles at the original equilibrium value
• Price rises and quantity rises
• Price falls and quantity increases
• Price settles at the original equilibrium value and quantity increases