Question 1

Which of the following can eliminate the problem of scarcity?

Group of answer choices

The use of market mechanisms.

Exploration that helps us find new resources.

Wise use of our resources.

None of the above because scarcity cannot be eliminated

Flag question: Question 2

Suppose your expenses for this term are as follows: tuition: $10000, room and board: $6000, books and other educational supplies: $1000. Further, during the term, you can only work part-time and earn $8000 instead of your full-time salary of $20000. What is the opportunity cost of going to university this term, assuming that your room and board expenses would be the same even if you did not go to university?

Group of answer choices

$11,000

$17,000

$23,000

$29,000

Flag question: Question 3

What are the attainable production points on a production possibility curve?

Group of answer choices

The horizontal and vertical intercepts

The points along the production possibility frontier

The points outside the area enclosed by the production possibility frontier

The points along and inside the production possibility frontier

Flag question: Question 4

If the quantity demanded exceeds the quantity supplied, then there is:

Group of answer choices

a shortage and the price is below the equilibrium price.

a shortage and the price is above the equilibrium price.

a surplus and the price is below the equilibrium price.

a surplus and the price is above the equilibrium price.

Flag question: Question 5

Suppose that when the price of strawberries decreases, Simone increases her purchases of whipped cream. To Simone

Group of answer choices

strawberries and whipped cream are complements.

strawberries and whipped cream and substitutes.

strawberries and whipped cream are normal goods.

strawberries are a normal good and whipped cream is an inferior good.

Flag question: Question 6

Olive oil producers want to sell more olive oil at a higher price. Which of the following events would have this effect?

Group of answer choices

An increase in the price of olive oil presses.

A decrease in the cost of transporting olive oil to markets.

An increase in the price of land used to plant olives.

Research finds that consumption of olive oil reduces the risk of heart disease.

Flag question: Question 7

Assuming that butter and margarine are substitute goods. When the price of butter increases and a technological advance in margarine production occurs at the same time:

Group of answer choices

the equilibrium price of margarine rises and the equilibrium quantity of margarine falls.

the equilibrium price of margarine rises and the equilibrium quantity of margarine rises.

the equilibrium price of margarine rises and the equilibrium quantity of margarine might rise or fall.

the equilibrium quantity of margarine rises and the equilibrium price of margarine might rise or fall.

Flag question: Question 8

Suppose a hurricane decreased the supply of oranges so that the price of oranges rose from $120 a tonne to $180 a tonne and quantity sold decreased from 800 tonnes to 240 tonnes. The absolute value of the price elasticity of demand is _____. (Note: The mid-point formula must be applied).

Group of answer choices

0.11

0.37

2.69

0.33

Flag question: Question 9

Which of the following is NOT a determinant of a good's price elasticity of demand?

Group of answer choices

The slope of the demand curve

The share of the good in the consumer's total budget

Whether the good is a luxury or a necessity

The passage of time

Flag question: Question 10

In late 2010, early 2011, a large amount of banana crops in Australia was wiped out due to a cyclone sweeping through Queensland. However, it was found that the total amount of revenue earned by all banana farmers in Australia collectively was higher after the cyclone compared to before.

Given the above information, which of the following statements is correct?

Group of answer choices

The demand for bananas in Australia is elastic

The demand for bananas in Australia is inelastic

After the cyclone, the price of bananas must have shot up, turning bananas into a luxury product.

There is not enough information to conclude on the price elasticity of demand for bananas in Australia.

Flag question: Question 11

Swin Cinema has been screening the latest Batman movie for several weeks. The table below shows the data on price and total revenue earned from this movie.

Price	Total Revenue
$5	$1,000
$10	$2,000
$20	$4,000
$30	$6,000
$40	$8,000

What can we say about the price elasticity of demand for this Batman movie?

Group of answer choices

The demand for the movie is inelastic

The demand for the movie is perfectly inelastic

The demand for the movie is unit elastic

There is no data on quantity, therefore, we cannot judge the price elasticity of demand for the movie

Flag question: Question 12

Which of the following is the implicit cost for a typical firm?

Group of answer choices

The cost of labour

The opportunity cost of capital owned and used by the firm

The cost of energy used in production

None of the above

Flag question: Question 13

Average fixed costs of production _____.

Group of answer choices

remain constant

will rise at a fixed rate as more is produced

graph as a U-shaped curve

fall as long as output is increased

Flag question: Question 14

After Suzie, owner of Suzie's Sweet Shop, hires her 8th worker, the average product of labour declines. Which of the following statements must be true?

Group of answer choices

The marginal product of the 8th worker is negative.

The marginal product of the 8th worker is less than the average product of labour before the 8th worker was hired.

Suzie's profits would be greater if she did not hire the 8th worker.

The average product of labour is negative.

Flag question: Question 15

If production displays economies of scale, the long-run average cost curve is -------.

Group of answer choices

above the short-run average total cost curve

downward sloping

upward sloping

below the long-run marginal cost curve