As a result of an increase in price of labour, more people get re-skilled, this will lead to

an increase in supply and a decrease in demand

Oligopoly characteristics:

limited competition, with achievable super-normal profit

a few firms control the market, high barriers to entry

Comparative Advantage suggests:

Countries should produce what they are most efficient at

In Monopolistic Competition, .....

producers supply a slightly differentiated product.

In the goods' markets

households are buyers and firm are sellers

Why would two nations trade?

They each have a comparative advantage in something

What is an oligopoly?

Several companies working together to dominate an industry

In the circular flow of income, an injection is...

Money that enters firms from a sector other than households

If the Government relaxed the laws regarding the planning permission

the supply of newbuilt houses will increase and the prices will decrease

What is comparative advantage

The producer can rpoduce with the lowest opportunity cost

In the CFI which ones are the injections within the economy?

Investments, export expenditure and Government expenditure

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Economics revision

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Questions 28

Answers

1
Principal-agent problem arises because of the divorce of ownership and control.
True
False
2
As a result of an increase in price of labour, more people get re-skilled, this will lead to
an increase in price of labour
an increase in supply and a decrease in demand
all of the above
a decrease in price of labour
3
Oligopoly characteristics:
A common structure in which firms have many competitors.
limited competition, with achievable super-normal profit
A market with no homogeneous products.
Barriers to entry and exit are low.
4
Which of the following is NOT an injection into the circular flow of income?
Government Spending
Taxation
Exports
Investment
5
If the demand for a particular labour exceeds supply, what do we have?
shortage in supply
Surplus in supply
neither shortage nor surplus
equilibrium
6
An oligopoly is:
a few firms control the market, high barriers to entry
The complete opposite of monopol
Low barriers to entry, many firms in the market
one firm controlling a market
7
In which of the 4 market structures will you place a Game developer who gets a patent on a new game?
monopolistic competition
monopoly
perfect competition
oligopoly
8
When will a firm shut down in the long run?
when P>ATC
when P=ATC
when P<ATC
none of the above
9
Inferior goods have negative income elasticities of demand...
False
True
10
Comparative Advantage suggests:
Accruing Gold is the best objective for countries
Countries should produce what they are most efficient at
Free trade is bad
Countries should be self-sufficient
11
A shortage in supply of labour will lead to a decrease in price which will will lead to an increase supply labour.
True
False
12
CFI is a visual aid that shows the flow of inputs and outputs within an economy.
True
False
13
Assymetric information means that the managers have more information than the owners about the company's position
False
True
14
In Monopolistic Competition, .....
there are high barriers to entry.
there are large start-up costs
producers supply a slightly differentiated product.
firms have high market power
15
In the goods' markets
none of the above
households are buyers and firm are sellers
neither households nor firms are buyers
households are sellers and firms are buyers
16
When the circular flow of income is EXPANDING...
Leakages>Injections
Injections>Leakages
Injections = Leakages
Injections < Leakages
17
Why would two nations trade?
neither has a comparative advantage
Neither has an absolute advantage
They each have a comparative advantage in something
They each have absolute advatages
18
The advantages of international trade include...
increased costs
less choice
Lower prices
less competition
19
Supply is more elastic over
over the short and long term as well
the medium term
the short term
the long term
20
What is an oligopoly?
An advanced version of the game Monopoly
Several companies working together to dominate an industry
A technical term for special effects
Oen of many roles on a film set
21
The profit maximising position is where MC=MR for
oligopoly
Monopoly
perfect cometition
all of the above
22
Equilibrium price and quantity is where the demand meets supply
False
True
23
If P<ATC
the firm will make a profit
the firm will make a loss
all of the above
neither a profit nor a loss
24
In the circular flow of income, an injection is...
Money that enters firms from a sector other than households
Money that enters households from firms
Money that enters households from a sector other than firms
Money that enters firms from households
25
If the Government relaxed the laws regarding the planning permission
the supply of newbuilt houses will increase and the prices will decrease
there will be no change
the demand for newbuilt houses will increase
the supply of newbuilt houses will decrease and prices will increase
26
What are the factors of production?
labour
capital
all of the above
land
27
What is comparative advantage
The producer can produce with decent opportunity costs
The producer can produce with the highest opportunity cost
The producer can produce with the middlest opportunity costs
The producer can rpoduce with the lowest opportunity cost
28
In the CFI which ones are the injections within the economy?
Net savings, export expenditure and and Government expenditure
Net savings, net taxes and import expenditure
none of the above
Investments, export expenditure and Government expenditure

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