Unit 1 and 2 SL Quizpdf

Unit 1-2 microeconomics quiz (SL)
1. Which of the following are not included as one the nine central concepts.
A. Efficiency
B. Choice
C. Economic well-being
D. Equality
2
2. Which of the following is a factor reward:
A. Welfare benefit payments
B. Child support
C. Rent
D. Pension payments
3
3. Which of the following explains why the PPF curve is not linear:
A. The cost of transportation
B. Customers and producers have different tastes and preferences when it comes to
consumption and production
C. Companies cannot (in the short run) switch factors of production between the
production of one good or service and another
D. Factors of production are not perfect substitutes for each other
4
4. The walled city of Kowloon, which operates outside of the control of central
government, is sometimes referred to as the only example of which type of economic system?
A. Free market
B. Primitive
C. Command
D. Mixed
© Mark Johnson,
InThinking www.thinkib.net/Economics 1
5. What is meant by the term refutation?
A. The process of making value judgements in policy making
B. The action of proving a statement or theory to be wrong
C. The economic idea that all economic ideas have to be refuted
D. The thing that differentiates positive from normative statements
6
6. Which of the following is not a non-price determinant of supply?
A. Tastes and preferences
B. Supply
C. Income
D. The price of substitutes and compliments
7
7. Which of the following is not a non-price determinant of supply?
A. Demand for the good or service
B. Changes in costs of factors of production (FOPs)
C. Indirect taxes and subsidies
D. Future price expectations
8
8. Which of the following is not a functions of the price mechanism
A. Incentives
B. Signalling
C. Rationing
D. Consumer and producer surplus
© Mark Johnson,
9. Which statement is true about allocative efficiency at the competitive market equilibrium?
A. It represents the point where total consumer utility is maximised
B. It represents the point where producer surplus = consumer surplus and so social /
community surplus is maximised
C. It represents the point where marginal benefit (MB) equals marginal cost (MC)
D. It represents the point when businesses are operating at the lowest point on the
average cost curve
10
10. Price elasticity of demand is calculated by which of the following formulae:
A. Change in demand / change in selling price
B. % change in price / % change in demand
C. % change in demand / % change in selling price
D. % change in quantity demanded / % change in selling price
11
11. Each of the following are determinants of PED except for:
A. The degree of necessity
B. Time
C. The relationship between PED and total revenue
D. The number and closeness of substitutes
12
12. Income elasticity of demand is calculated by which of the following formulae:
A. % change in demand / % change in income
B. % change in income / % change in demand
C. Change in demand / change in income
D. % change in income / % change in quantity demanded
13
© Mark Johnson,
13. A good has a YED equal to -1, it can be inferred therefore that the good is an example of
a .................
A. Elastic good
B. Inferior good
C. Normal good
D. Inelastic good
14
14. Each of the following are determinants of PES except for:
A. Ability to store the product
B. Time
C. Whether the good is a luxury or a necessity product
D. Mobility of the factors of production
15
15. Which of the following should not be a reason for government intervention in markets?
A. To influence consumption levels
B. To influence production levels
C. To collect government revenue
D. To support the real incomes of wealthy households
16
16. Which of the following is not a form of government intervention in markets?
A. Price controls, including price ceilings and price floors
B. Direct provision of services
C. Command and control regulation and legislation
D. Direct taxes, including income tax
17
© Mark Johnson,
17. Market failure can be best described as:
A. When the market fails to allocate resources at the point where MSB=MSC
B. When the production of demerit goods produces negative externalities
C. When the market produces less public and merit goods than the socially optimum
level
D. When the market fails to produce the right quantity of goods and services
18
18. Common access resources are those goods and services which ..............
A. Produce positive externalities to third parties when consumed
B. Produce positive externalities to third parties when produced
C. Goods or services which are non-excludable and non-rivalrous
D. Goods or services which are non-excludable
19
19. Which of the following government services would also be a public good?
A. Public hospitals
B. Public schools
C. All of the above
D. Military
20
20. Which of the following explains why public goods can only be provided
by governments?
A. Free rider problem
B. The global nature of sustainability issues
C. The challenges faced in international cooperation
D. Externalities created
© Mark Johnson,

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Unit 1-2 microeconomics quiz (SL)

D. Factors of production are not perfect substitutes for each other

B. The action of proving a statement or theory to be wrong

C. The economic idea that all economic ideas have to be refuted

D. The thing that differentiates positive from normative statements

D. The price of substitutes and compliments

B. Changes in costs of factors of production (FOPs)

C. Indirect taxes and subsidies

D. Future price expectations

D. Consumer and producer surplus

B. % change in price / % change in demand

C. % change in demand / % change in selling price

D. % change in quantity demanded / % change in selling price

C. The relationship between PED and total revenue

D. The number and closeness of substitutes

B. % change in income / % change in demand

C. Change in demand / change in income

D. % change in income / % change in quantity demanded

C. Whether the good is a luxury or a necessity product

D. Mobility of the factors of production

B. To influence production levels

C. To collect government revenue

D. To support the real incomes of wealthy households

B. Direct provision of services

C. Command and control regulation and legislation

D. Direct taxes, including income tax

B. When the production of demerit goods produces negative externalities

B. Produce positive externalities to third parties when produced

C. Goods or services which are non-excludable and non-rivalrous

D. Goods or services which are non-excludable

C. All of the above

B. The global nature of sustainability issues

C. The challenges faced in international cooperation

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