Economics

Question 1

1A maximum price set below equilibrium leads to

Hard

A. higher output B. lower demand C. surpluses D. shortages

Question 2

2Demand for a good is price inelastic when

Easy

A. a small price change causes a large change in quantity demanded B. quantity demanded changes by a smaller percentage than price C. the good has many close substitutes D. elasticity is greater than 1

Question 3

3A change in demand (a shift of the demand curve) can be caused by a change in

Easy

A. the price of the good itself B. consumers' income C. the cost of production D. the quantity supplied

Question 4

4If the supply curve is perfectly elastic, an increase in demand will

Hard

A. raise price only B. raise quantity but not price C. have no effect D. lower price

Question 5

5The demand for labour is a

Easy

A. derived demand B. joint supply C. composite supply D. Giffen demand

Question 6

6A maximum price set by government below the equilibrium price leads to

Easy

A. a surplus B. a shortage C. no effect D. lower demand

Question 7

7A Giffen good is one whose demand

Medium

A. falls when income falls B. is perfectly elastic C. rises when its price rises D. never changes

Question 8

8Goods that are used together, such as cars and petrol, are called

Easy

A. complements B. inferior goods C. Giffen goods D. substitutes

Question 9

9Composite demand occurs when a good

Medium

A. is free B. is demanded with another good C. has several different uses D. is a luxury

Question 10

10Income rises by 10% and demand for a good falls by 5%. The good is

Hard

A. luxury B. normal C. inferior D. Giffen only