what is opportunity cost?

The thing you give up by doing something else.

A price ceiling will have NO effect if:

it is set above the equilibrium price

To increase supply...

Decrease sales tax, Add a subsidy

Nationalization occurs when the government

Takes control in specific industry

What is consumer surplus?

Difference between the price paid and maximum price willing

What is the formula for Income Elasticity of Demand

%change in quantity demanded / %change in income

Public goods are those for which

individuals who do not pay cannot be excluded from consuming

Charges placed by government on goods and services

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AS Microeconomics review

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Questions 20

Answers

1
In a Planned economy...
entrepreneurs are encouraged
there are wide gaps between the rich and poor
the Government sets the prices
competition sets the prices
2
Which of these is NOT one of the 4 factors of production?
Captial
Employees
Land
Labor
3
Which of the following goods has a negative income elasticity of demand
bread
shoes
Cars
Items from dollar stores
4
A point along the Production Possibility Curve is:
achievable but inefficient
fully efficient
impossible to achieve
none of the others
5
The cross-price elasticity of demand can tell us whether goods are
luxuries or necessities.
complements or substitutes.
elastic or inelastic.
normal or inferior.
6
what is opportunity cost?
Picking a worse alternative.
Choosing a different good.
Wanting to do something else.
The thing you give up by doing something else.
7
Consumer Surplus after Max Price control
7
1,3
3,4
1,2
8
A price ceiling will have NO effect if:
the equilibrium price is above the price ceiling
it creates a shortage
it is set above the equilibrium price
set below the equilibrium price
9
The basic functions of money are all of the following except...
Unit of Account
Measure of Value
Medium of Exchange
Store of Value
10
To increase supply...
Change the law
Add a quota
Decrease sales tax
Add a subsidy
11
What effect do taxes have on the equilibrium price?
None, it stays the same
Trick question. There's no equilibrium price
Lowers it
Raises it
12
If the price of a substitute rises, the demand curve for a substitute will
shift left
shift along, extension
shift right
shift along, contraction
13
Nationalization occurs when the government
disposses foreign company
Takes control in specific industry
Peacefully merges with neighbor countries
Expands its borders via war
14
A perfectly elastic demand curve....
is a line that goes through the origin
is perfectly vertical
has a more gradual slope
is perfectly horizontal
15
What is consumer surplus?
The consumers who are able to purchase the product
The additional customers who are not willing and able to buy
Difference between the price paid and maximum price willing
The additional welfare received by earning additional income
16
The price elasticity of demand for luxiouros goods is
Perfectly inelastic
Elastic
Infinitely elastic
Inelastic
17
What is the formula for Income Elasticity of Demand
%change in quantity demanded / %change in interchangeability
%change in quantity demanded / %change in price
%change in quantity demanded x %change in price
%change in quantity demanded / %change in income
18
What do subsidies lower?
Demand
Blood Pressure
Supply
Price
19
Public goods are those for which
individuals who do not pay can be excluded from consuming.
individuals who do not pay cannot be excluded from consuming
no external costs exist.
external costs exist.
20
What is taxation?
Charges placed by government on goods and services
The value of sterling against other currencies
The annual cost of a loan to a borrower
The increase in prices due to excessive demand in the economy

AS Microeconomics review Flashcards | StudBud