What is market failure? Where the

free market produces a misallocation of resources

The free market overproduces 20 units. Government intervention fails when...

Afterwards, there is underproduction of 30 units

Which of these is NOT a function of money? It must be

supported as legal tender by the government

Minus 3. You would expect to see this figure if

it is the PED for a price elastic good

Where is consumer suplus found? The area

below the demand curve but above the price

A college spends £1000 to deliver top up classes. An opportunity cost to the college is

The revision guides they could have bought with the money

How is a specific tax shown on a diagram?

a parallel left shift in supply

Which of these will NOT cause the supply curve for good A to shift left?

an increase in the subsidy given to produce it

Zero. You would expect to see this figure if

it is the XED for an independent good

Which of these will NOT cause the demand curve for good A to shift left?

an increase in the price of good A

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Theme 1 Economics Revision

23 termsStudBud Administration1,126 plays

RANDOMISE ANSWERS! (AND POSSIBLY QUESTIONS) A quick Quiz of many Theme 1 Economics concepts #economics #microeconomics #theme1 #as

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Questions 23

Answers

1
What do consumers hope to maximise?
their prestige
utility
economic welfare
profit
2
What is market failure? Where the
government produces a misallocation of resources
social costs equal social benefits
externalities don't exist
free market produces a misallocation of resources
3
The free market overproduces 20 units. Government intervention fails when...
Afterwards, there is still 15 units of overproduction
The welfare loss was £50. After, it is still £30
Afterwards, there is underproduction of 30 units
Afterwards, there is no underproduction
4
Which of these is NOT a function of money? It must be
supported as legal tender by the government
acceptable when exchanging goods
a means for deferred payment
a store of value
5
Minus 3. You would expect to see this figure if
it is the PED for a price elastic good
it is the YED for a necessity
it is the PES where there are unemployed resources
it is the XED for a close substitute
6
Which of these will cause PES to be low?
it takes up a small proportion of a firm's costs
there is little spare capacity
it takes up a high proportion of consumers incomes
the good is a necessity
7
A negative externality results in
overproduction
underproduction
MSB>MPB
government failure
8
Which of these is the best example of a pure public good?
the NHS
TFL
the army
the police
9
Where is consumer suplus found? The area
below the demand curve but above the price
below the supply curve but above the price
above the supply curve but below the price
above the demand curve and above the price
10
Which of these economists would tend to favour a planned economy?
Karl Marx
John Maynard Keynes
Adam Smith
Friedrich Hayek
11
Which of these is not a benefit of division of labour?
more productivity
more variety in peoples jobs
lower prices
lower costs of output
12
A college spends £1000 to deliver top up classes. An opportunity cost to the college is
The revision guides they could have bought with the money
The better pass rates the college gets
The higher grades students get from attending the classes
What the students could have done in the time
13
Which of these policies could NOT correct a market with positive externalities?
A subsidy for producers of it
A tax on producers of it
Direct state provision of it
A positive government information campaign
14
There is an increase in supply and a decrease in demand. This MUST result in
quantity falling
quantity rising
price rising
price falling
15
How is a specific tax shown on a diagram?
a divergent left shift in demand
a parallel left shift in supply
a parallel left shift in demand
a divergent left shift in supply
16
How would a rise in income tax for a normal good be shown on a diagram?
a right shift in demand
a right shift in supply
a left shift in supply
a left shift in demand
17
A normative statement contains
something that can be proved
a value judgement
an opinion
measurable facts
18
A movement along the ppf shows
An increase in demand
Lower unemployment of resources
Supply falling
Opportunity cost
19
Which of these will NOT cause the supply curve for good A to shift left?
a rise in the tax imposed upon it
a rise in demand for a good in competitive supply
an increase in the subsidy given to produce it
a rise in the wage costs of workers producing it
20
Zero. You would expect to see this figure if
it is the YED for a luxury
it is the PED for a price elastic good
it is the XED for an independent good
it is the PES and there are spare resources
21
Which of these is not a market driven solution to market failure?
a regulation
a subsidy
tradable permits
an indirect tax
22
Plus 1.8. You would expect to see this figure if
it is the PES in the immediate short term
it is the XED for a weak substitute
it is the PED for a price elastic good
it is the YED for a luxury
23
Which of these will NOT cause the demand curve for good A to shift left?
a fall in the price of a substitute
an increase in the price of good A
a rise in the price of a complement
a rise in income if good A is inferior

Theme 1 Economics Revision Flashcards | StudBud