1. The law of demand implies that, other things being equal:

Select one:

a.as the price of electronic games increases, the quantity of electronic games demanded will increase.

b.as the demand for electronic games increases, the price of electronic games will fall.

c.as household incomes rise, the quantity of electronic games demanded will decrease.

d.as the price of electronic games increases, the quantity of electronic games demanded will decrease.

2.A point inside, or to the left of, a production possibilities curve indicates that:

Select one:

a.some of the economy's resources are unemployed.

b.the economy is growing.

c.more of one good can be produced only by giving up some of the other good.

d.the economy is operating at full employment.

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

Select one:

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

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

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

d.beer and nuts are substitutes.

4.The opportunity cost of a purchase is best measured by:

Select one:

a.the amount of time it took to make the purchase.

b.the quantity of resources used to produce the purchase.

c.the alternative purchase that is forgone.

d.the number of workers needed to manufacture the purchase.

5.Which of the following will not necessarily lead to an outward shift of Australia's PPF?

Select one:

a.The Australian government building more hydroelectric power facilities.

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

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

d.Australian farmers raising more poultry and less cattle.

Clear my choice

6.Which of the following would not lead to a change in the supply of chocolate ice cream?

Select one:

a.a wage increase for ice cream factory workers.

b.technological improvements in the making of ice cream.

c.an increase in the price of milk, a key component of ice cream.

d.consumers' flavor preference changes from chocolate to vanilla.

7.Reducing the Supply of Drugs is not likely to lower property crime because demand for drugs is ____ and lowering the supply will ______ the amount that users spend on drugs.

Select one:

a.Elastic, Lower

b.Inelastic, Raise

c.Inelastic, Lower

d.Elastic, Raise

Clear my choice

8.Which of the following would cause a shift in the supply curve of bananas to the right?

Select one:

a.An increase in demand for bananas, everything else remaining unchanged.

b.A fall in the price of bananas.

c.A rise in the price of an input used in the production of banana.

d.A reduction in the price of an input used in the production of bananas.

9.The opportunity cost of producing additional units of a good increases, because

Select one:

a.economic resources are equally adaptable to the production of all goods

b.as the production of a good increases, the amount of other goods sacrificed diminishes

c.as the unemployment rate falls, business will pay a higher wage rate to a labour

d.economic resources are not equally adaptable to the production of all goods

10.Which of the following is correct? Resources are:

Select one:

a.only land and labour.

b.the fundamental source of abundance.

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

d.the inputs used to produce goods and services.

11.Suppose good X is a normal good. Further suppose that the number of sellers in the market decreases and consumers' incomes increase. What would you expect to happen to equilibrium price and quantity in the market?

Select one:

a.The equilibrium price will definitely increase and the equilibrium quantity will remain unchanged.

b.The equilibrium price would decrease, but the impact on equilibrium quantity in the market would be ambiguous

c.Both equilibrium price and quantity would decrease

d.The equilibrium price would increase, but the impact on equilibrium quantity in the market would be ambiguous

12.If the supply of coffee falls due to bad weather conditions in coffee growing countries, then:

Select one:

a.the price of coffee will fall and the quantity will rise.

b.the price and quantity of coffee will fall.

c.the price and quantity of coffee will rise.

d.the price of coffee will rise and the quantity will fall.