deal with the buying and selling of goods and services

A shift to the left of a demand curve could be due to a

a rise in the price of a complement

A “price floor” will create

A surplus in supply as producers attempt to maximise profits

The discovery of a new gas field off the Western Australian coast would result in

an increase in supply, creating a lower price for gas.

The Law of Demand states

As the price of a good rises, people buy less

A contraction in demand is caused by

an increase in the price of the good

How will price change eliminate a shortage?

As the price rises, the Qd decreases while the Qs increases

Two non-price factors affecting supply are:

technology /costs of production

A price change will indicate

a movement along the demand curve (expansion or contraction)

Two things underpinning the Law of Demand are:

The income effect / the substitution effect

A normal good is defined as a good for which demand increases as

the income of consumers increases

Which of the following would not affect the price elasticity of demand for a product?

the amount supplied by producers

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ATAR Economics Unit 1 Exam Revision

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Revision of ATAR Unit 1, Year 11 Economics. WA

Flashcards26 cardsFPractice quizPHost liveL

Questions 26

Answers

1
The payments for the factors of production, Capital and land respectively, are:
Rent and profit
Wages and profit
Interest and rent
Wages and rent
2
Product markets
occur between firms and banks
deal in the buying and selling of the factors of production
are an injection to the circular flow
deal with the buying and selling of goods and services
3
Which is incorrect? A competitive market is characterised by:
very similar products (homogeneous)
easy entry into the market
firms are price takers
two to three dominating firms
4
A shift to the left of a demand curve could be due to a
fall in the quantity supplied
rise in the price of a substitute
a rise in the price of a complement
fall in the price of the good
5
A “price floor” will create
A contraction in supply as producers react to lower prices
A surplus in supply as producers attempt to maximise profits
An efficient allocation of resources and an undersupply
A shortage in the production of output in relation to demand
6
The discovery of a new gas field off the Western Australian coast would result in
an expansion of supply, creating a higher price for gas.
an increase in supply, creating a lower price for gas.
a decrease in supply, creating a higher price for gas.
a contraction of supply, creating a lower price for gas.
7
Which of the following would cause a contraction in demand for petrol?
a fall in the price of petrol
a rise in the price of petrol
a decrease in the level of real incomes
a switch to electric powered cars
8
The Law of Demand states
As the price of a good rises, people buy less
The buying intentions of people
The more supplied, the lower the price
As the price of a good falls, people buy less
9
A contraction in demand is caused by
a decrease in the number of consumers
a negative change in market sentiment
an increase in the price of the good
an increase in the unemployment rate
10
How will price change eliminate a shortage?
As the price rises, the Qd decreases while the Qs increases
As the price rises, the Qd increases while the Qs decreases
As the price falls, the Qd decreases while the Qs increases
As the price falls, the Qd increases while the Qs decreases
11
Two non-price factors affecting supply are:
technology /costs of production
Prices of other goods a firm produces / demographic factors
technology / expectations of consumers
expectations of producers / demographic factors
12
A good for which the demand is unitary elastic, has a price elasticity coefficient:
Less than one
Greater than one
Equal to one
Less than zero
13
A price change will indicate
a movement along the demand curve (expansion or contraction)
an expansion of the demand curve
an increase or decrease of the demand curve
a change in elasticity
14
Which of the following is not a non-price factor affecting demand?
The price of unrelated goods
Levels of disposable income
Demographic factors
Expectations of consumers
15
Two things underpinning the Law of Demand are:
The profit motive / the substitution effect
Expectations of consumers / the income effect
The income effect / the profit motive
The income effect / the substitution effect
16
Which of the following products would have the lowest price elasticity of demand?
petrol
restaurant meals
leisure airline travel
passenger motor vehicles
17
If the price of going to the movies increased, what would happen to the demand of popcorn?
decrease
stay the same
become more inelastic
increase
18
An increase in both the demand and the supply for tomatoes will cause the tomato market:
price to decrease
price to increase
quantity to increase
quantity to decrease
19
A normal good is defined as a good for which demand increases as
the number of consumers of the good increases
its price decreases
the income of consumers increases
the price of a substitute increases
20
Which of the following is considered a necessity?
orange juice
bell-bottom jeans
bread
alcohol
21
Which of the following would not affect the price elasticity of demand for a product?
the number of substitutes available
the proportion of income required to purchase the product
the amount supplied by producers
the time it takes for consumers to respond to a price change
22
According to the law of supply, an increase in price _____________ the quantity supplied
stimies
increases
interrupts
decreases
23
Which would be considered compliments?
popcorn and movies
pizza and homework
coke and pepsi
toothpaste and cars
24
What immediate effect will a large increase in petrol prices have on motor scooters?
increase bus transportation usage
increase their price
decrease bus transportation usage
increase their demand
25
The change in price is 7%, the change in demand is 5%. This shows:
The good is elastic
The good is inferior
The good is a compliment
The good is inelastic
26
A producer decides to increase the price on its inelastic good. Total revenue will?
It will fluctuate.
It will fall.
It will stay the same.
It will rise.

ATAR Economics Unit 1 Exam Revision Flashcards | StudBud