The study of economics

Select one:

a. is concerned with proving that capitalism is better than socialism.

b. is a very narrow endeavour.

c. focuses on how a business should function.

d. is a way of analysing decision-making processes caused by scarcity.

The reason that opportunity costs arise is that

Select one:

a. there are no alternative decisions that could be made.

b. people have unlimited wants.

c. resources are scarce.

d. an economy relies on money to facilitate exchange of goods and services.

Which of the following isnotan opportunity cost of attending college?

Select one:

a. The alternative uses of the time you spend studying.

b. The cost of the food that you consume while you are attending college.

c. The tuition fees that you or your Local Authority pays.

d. The income that you could have earned if you did not attend college.

A rise in supply will most likely

Select one:

a. reduce demand.

b. reduce warehouse space.

c. reduce price.

d. increase price.

A rise in demand will most likely

Select one:

a. reduce price.

b. lengthen queues.

c. increase price.

d. reduce supply.

Which of the following correctly describes how price adjustments eliminate a shortage?

Select one:

a. As the price rises, the quantity demanded will increase while the quantity supplied decreases.

b. As the price falls, the quantity demanded will increase while the quantity supplied increases.

c. As the price rises, the quantity demanded will decrease while the quantity supplied increases.

d. As price falls, the demand for substitutes rises, getting rid of the shortage.

e. As the price falls, the quantity demanded will decrease while the quantity supplied increases.

When a decrease in the price of good A causes an increase in demand for good B, the goods are ________.

Select one:

a. inferior

b. complements

c. normal

d. substitutes

The price of apples falls by 5% and quantity demanded increases by 6%. This means that the demand for apples is

Select one:

a. perfectly inelastic.

b. elastic.

c. perfectly elastic.

d. inelastic.

A firm will maximise its profits if it produces and sells the level of output where

Select one:

a. marginal revenue equals marginal cost.

b. average revenue equals marginal cost.

c. marginal revenue equals average cost.

d. average revenue equals average cost.

If all firms were perfectly competitive, which of the following would betrue?

Select one:

a. Final products would be distributed among households efficiently.

b. The market system would produce the things that people want.

c. Resources would be allocated among firms efficiently.

d. All of the above.