Which definition is the most accurate for the income effect?

Δ price on Quantity demanded due to price changes

What is the most accurate definition of microeconomics?

Area of economics covers individual units - firms/households

What is the most accurate definition of macroeconomics?

Branch of economics covering economic aggregates e.g. output

What is the most accurate explanation of opportunity cost?

Cost of activity measured in terms of alternative foregone

As part of the law of demand which definition is the most accurate for the substitution effect?

Δ price on Quantity demanded -consumer switching alternative

Identify which determinant of demand would not cause a shift in the demand curve of coffee

Decrease in the price of coffee

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Economics - basics

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Questions 10

Answers

1
What is the basic economic problem?
Not enough factors of production to solve the problem
Lack of money and government involvement
Scarcity of resources
Business making too much profit
2
Which of the following is not one of the factors of production?
Land
Labour
Money
Capital
3
Which definition is the most accurate for the income effect?
Δ price on Quantity demanded due to price changes
Being more wealthy due to inheriting more money
Having more money to use
Choosing products that are cheaper and gaining more income
4
Which of the following is not a key economic indicator?
Inflation
Gross domestic product
Employee earnings
Unemployment
5
What is the most accurate definition of microeconomics?
Area of economics that studies economic aggregates
Issues that affect the whole of the economy
A small part of the economy
Area of economics covers individual units - firms/households
6
Which one of the following is not one of the key basic needs?
Air
Shelter
Cars
Food
7
What is the most accurate definition of macroeconomics?
Branch of economics covering economic aggregates e.g. output
Economy that covers the whole country
Type of economics that involves everybody
Whole economy and the key areas that governments focus on
8
What is the most accurate explanation of opportunity cost?
Cost of missing out
Economic cost to the country and investment will decrease
Cost of activity measured in terms of alternative foregone
Opportunities missed and this can be costly to a business
9
As part of the law of demand which definition is the most accurate for the substitution effect?
Altering the product to improve the quality
Δ price on Quantity demanded -consumer switching alternative
Changing the product with a reserve
Buying a product that is more improved than the original
10
Identify which determinant of demand would not cause a shift in the demand curve of coffee
Charging extra for plastic coffee cups
Increase in advertising for coffee
Decrease in the price of coffee
Decrease in the price of tea

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