Section I (20 marks) Multiple Choice Questions Answer ALL questions in this section. One mark for each question. Choose the best answer. Provide your answers in the table at the end of this section. 1. Which of the following is likely to have the highest price elastic demand? A Salt B. Rice C. Candies D. Calculators 2. Which of the following is(are) classified as having price elastic demand? 1 Price elasticity of demand of oranges is 1.2 II. Price elasticity of demand of apples is 16. IL Price elasticity of demand of strawberries is 2.2. A. I only B. I and II C. III only D. I, II and III 3. We face trade-offs in our daily lives because of A. scarcity B. efficiency C. equality D. incentive 4. In general, when unemployment rate falls, we can expect A inflation rate to rise B inflation rate to fall C. inflation rate to remain constant D. no relationship between unemployment rate and inflation rates 5. The original equilibrium price of apples is $10 and the equilibrium quantity is 160 The new equilibrium price of apples is $8 and the new equilibrium quantity is 200. Which classification of demand elasticity does apple belong if the mid-point method is used to calculate the price elasticity? A Perfectly elastic B Elastic C Unit elastic D Inelastice 6. Which of the following isare) correct? 1 "Sports cars" has a higher price elasticity of demand than "Porsche sports cars IL "Rolex watch" has a higher price elasticity of demand than "water" A I only B. Il only C. Both I and I D. Neither I nor 11 7. When the price of cookies changes, the supply curve for cookies: A does not shift because the movement is along the original demand curve. B. does not shift because the movement is along the original supply curve. C. shifts and the new equilibrium price is the intersection of the new demand curve and the original supply curve D. shifts and the new equilibrium price is the intersection of the new supply curve and the original demand curve 8. Ins hires domestic helper to clean her house. Daisy cleans her own house. Which of the following will be included in the calculation of GDP 1 Iris payment to the domestic helper 11 Estimated value of Daisy's cleaning service A I only B Il only C Both I and I D. Neither I or Il 9. Suppose a competitive fum produces and sells 250 units of output for a total revenue of 58,750. If the fum increases the output to 251, what is the average revenue of the 251" A $350 B 538 C S41 D. $450 10. Which of the following are correct about how accountants and economists consider costs 1 Accountants consider only implicit costs 11 Economisconder both explicit and implicit costs. Ally B 11 only Clothil D. New Inox 11
