A production possibility frontier represents

the maximum amount of goods that can be made.

additional gain from one more unit of an activity

An expansion in the supply of ice-cream on the market may be caused by

an increase in the price of ice-cream.

A tax is a solutuion to which market failure?

Negative consumption externalities

In a purely competitive market during the summer months, it is likely that the price of woollen gloves would

decrease and the quantity of woollen gloves sold would decrease.

What is consumer surplus?

Difference between the price paid and maximum price willing

A monopoly creates a DWL because the monopoly

produces less than the efficient quantity

Law of increasing opportunity cost

When increasing production on one product the cost of it increases

If the price of Good A rises and the demand for Good B falls, then

XED is equal to 1 and goods are not related to each other

What is price elasticity?

change in quantity relative to change in price

The WA Fisheries have reported a decline in fish stocks world-wide over the last decade.This:

non-excludable and rival in consumption.

What is producer surplus?

Difference between price the producer is willing to charge & actually does

What is a price ceiling?

maximum price sellers are allowed to charge

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Year 11 Unit 1 REVISION

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Questions 22

Answers

1
Which of these is inelastic?
videogames
doctor services
restaurant meals
automobiles
2
A production possibility frontier represents
how many people to hire.
the maximum amount of goods that can be made.
the technology that should be used.
the resources that should be used.
3
Marginal benefit is
additional gain from one more unit of an activity
loss of highest-valued alternative
forgone opportunity
additional cost from one more unit of an activity
4
A price ceiling creates a...
Surplus
Shortage
5
An expansion in the supply of ice-cream on the market may be caused by
a decrease in the price of ice-cream.
an increase in the price of ice-cream.
an increase in the price of frozen yoghurt.
an increase in the supply of milk used in the production of ice-cre
6
A tax is a solutuion to which market failure?
Positive consumption externalities
Negative consumption externalities
Merit goods
Public goods
7
In a purely competitive market during the summer months, it is likely that the price of woollen gloves would
decrease and the quantity of woollen gloves sold would increase.
decrease and the quantity of woollen gloves sold would decrease.
increase and the quantity of woollen gloves sold would increase.
increase and the quantity of woollen gloves sold would decrease.
8
If price increases by 10% and quantity supplied rises by 20%, PES equals:
0.02
20.00
0.20
2.00
9
What is consumer surplus?
The consumers who are able to purchase the product
Difference between the price paid and maximum price willing
The additional customers who are not willing and able to buy
The additional welfare received by earning additional income
10
Which of these is NOT a determinant of the price elasticity of demand?
share of the budget
technology
amount of time
number of substitutes
11
A monopoly creates a DWL because the monopoly
produces less than the efficient quantity
produces more than efficient quantity
does not maximise profit
sets a price that is too low
12
Producer Surplus after Min Price control
3,6
5,6
2,5
1,2
13
Law of increasing opportunity cost
When increasing production on one product the cost of it increases
Spending more makes prices increasing
Value of items increase when their production increasing
Having more of one item decreses value
14
This is a Elastic Demand Curve
False
True
15
If the price of Good A rises and the demand for Good B falls, then
XED is equal to 1 and goods are not related to each other
XED is zero and goods are substitutes
XED is positive and goods are complementary
XED is negative and goods are complementary
16
What is price elasticity?
when the government stretches price margins
a price falls below the price floor
change in quantity relative to change in price
change in quantity equals change of supply
17
In terms of supply and demand, a subsidy will….
Increase supply
Decrease demand
Increase demand
Decrease supply
18
The WA Fisheries have reported a decline in fish stocks world-wide over the last decade.This:
excludable but non-rival in consumption.
excludable but rival in consumption.
non-excludable and rival in consumption.
non-excludable and non-rival in consumption.
19
What is producer surplus?
Difference between price the producer is willing to pay & actually does
Difference between price the consumer is willing to pay & actually does
Difference between price the consumer is willing to charge & actually does
Difference between price the producer is willing to charge & actually does
20
Negative externalities or social costs
must be paid for by the government.
result in an increase in economic wellbeing.
decrease our quality of life.
are fully paid for by the consumer.
21
The most common price floor today is _____.
salary workers
gdp
minimum wage
rent control
22
What is a price ceiling?
how high or low a market price can go
same as a price floor
maximum price sellers are allowed to charge
minimum price sellers are allowed to charge

Year 11 Unit 1 REVISION Flashcards | StudBud