The income elasticity of demand for potatoes is positive (i.e. > 0). This implies that potato is ___, therefore an increase in demand for potatoes implies that ____.

Select one:

a.an inferior good; income has increased

b.a normal good; income has decreased

c.a necessity; income is unchanged

d.an normal good; income has increased

The price elasticity of demand is calculated as:

Select one:

a.the change in quantity demanded divided by the change in price.

b.the change in price divided by the change in quantity demanded.

c.the percentage change in price divided by the percentage change in quantity demanded.

d.the percentage change in quantity demanded divided by the percentage change in price.

In relation to Australia's PPF, which of the following would cause a change in opportunity cost?

Select one:

a.Australian farmers raising more poultry and less cattle.

b.Santos Ltd, an oil and gas exploration company, discovering new oil deposits.

c.Genetic research that makes possible the production of disease-resistant wheat and other crops.

d.The Australian government building more hydroelectric power facilities.

Which of the following is correct? Resources are:

Select one:

a.the inputs used to produce goods and services.

b.only land and labour.

c.the fundamental source of abundance.

d.land, labour, the price system, and capital.

The higher the investment share of a country's GDP,

Select one:

a.The higher is the overall economic growth rate likely to be

b.The larger the population must be

c.The lower is the overall economic growth likely to be

d.The higher is the national debt

Three equivalent ways to measure GDP are total _____, total _____ and total ______.

Select one:

a.profits; production; saving

b.expenditure; income; profits

c.investment; consumption; saving

d.production; income; expenditure

If the cross elasticity of demand between beer and nuts is negative:

Select one:

a.an increase in the price of beer will have no effect on the equilibrium price of nuts.

b.an increase in the price of beer will cause an increase in the equilibrium price of nuts.

c.an increase in the price of beer will cause a decrease in the equilibrium price of nuts.

d.beer and nuts are substitutes.

Which of the following would lead to an increase in demand for pasties?

Select one:

a.A decrease in the price of meat pies, a substitute.

b.A decrease in Australia's population.

c.An increase in the price of tomato sauce, a complement.

d.A decrease in consumer income.

As a student of economics, when you speak of scarcity, you are referring to:

Select one:

a.the inability of society to satisfy all human wants because of limited resources.

b.the ability of society to consume all that it produces.

c.the ability of society to continually make technological breakthroughs and increase production.

d.the ability of society to employ all of its resources.

Which of the following statements is incorrect?

Select one:

a.If there is an increase in demand and no change in supply, there is an increase in the equilibrium price.

b.If there is an increase in demand and no change in supply, there is an increase in the equilibrium quantity.

c.If there is an increase in supply and no change in demand, there is a decrease in the equilibrium quantity.

d.If there is an increase in supply and no change in demand, there is a decrease in the equilibrium price.

Which of the following would not be included in Australia's GDP in this year's GDP?

Select one:

a.A new factory's purchase of used machines from a factory that is closing down.

b.Gross fixed private investment.

c.New South Wales government's purchase of fresh milk for public servants.

d.The USA government purchases 10 000 Australian made military boots.

Resources are allocated efficiently, and the sum of consumer surplus and producer surplus is maximised where

Select one:

a.price is greater than marginal cost

b.marginal benefit exceeds marginal cost.

c.price is equal to marginal cost.

d.marginal cost is equal to opportunity cost.

Which of the following statements is true for any profit-maximising firm?

Select one:

a.The firm will produce at the level of output where marginal cost is minimised.

b.The firm will produce at the level of output where marginal revenue equals marginal cost.

c.The firm will produce at the level of output where marginal revenue is maximised.

d.The firm will produce at the level of output where price equals marginal revenue.