Why might an increase in demand for Biofuels cause a decrease in the supply of Ethanol?

They share a common factor of production

Which of the following is most likely to cause Demand to increase?

A decrease in the price of a complementary good

The fundamental problem of Economics...

results in having to make choices

What is the likely cause of the shift from PPF5 to PPF6 on the graph?

Overly-intensive farming in years previous

What is the most likely explanation for the shifts shown in the graph for the energy market?

New oil deposits found and improved renewable technology

What is the most likely cause of the shift from PPF3 to PPF4 for a firm?

improvements in the production process of keyboards

Why are PPFs typically convex?

the opportunity cost increases with greater output of a good

Why do guns and butter face a convex PPF curve?

factors are not perfect substitutes across the markets

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PPFs, Supply and Demand

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Test on PPFs, Supply and Demand. AS/A2 Level Microeconomics.

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Questions 12

Answers

1
Why might an increase in demand for Biofuels cause a decrease in the supply of Ethanol?
They share a common factor of production
An increase in the scarcity of Ethanol
They are in joint supply
They are in competing demand
2
The relationship between Pilots and air travel is best described as...
Composite Demand
Competing Demand
Derived Demand
Joint Demand
3
Which of the following is most likely to cause Demand to increase?
An increase in price
A decrease in the price of a complementary good
An increase in wages
An increase in government subsidies
4
The fundamental problem of Economics...
is of unlimited consumer wants/desires
results in having to make choices
causes misallocation of resources
is of the finite resources available
5
What is the likely cause of the shift from PPF5 to PPF6 on the graph?
A deadly crop disease attacking wheat yield
Overly-intensive farming in years previous
A fall in global food and cereal prices
Crop rotation
6
Which of the following is most likely to shift Supply to the right?
a decrease in incomes in an economy
an increase in wages
a decrease on the costs of a substitute
a reduction in an indirect tax
7
What is the impact of an increase in the demand for wool on the lamb market?
An increase in price for Lamb
An increase in Demand for Lamb
Excess demand in the Lamb Market
An Increase in Supply for Lamb
8
What is the most likely explanation for the shifts shown in the graph for the energy market?
An increase in incomes in the economy
Improvements in renewable technology and a cold winter
A fall in incomes
New oil deposits found and improved renewable technology
9
What is the most likely cause of the shift from PPF3 to PPF4 for a firm?
improvements in the production process of keyboards
a migration of skilled laptop technicians into the economy
improvements in touch-screen technology
a price rise in laptops
10
Why are PPFs typically convex?
it's hard to make two different products
the opportunity cost falls as output increases
it costs more to make one product than the other
the opportunity cost increases with greater output of a good
11
Why do guns and butter face a convex PPF curve?
the goods are substitutes of each other
factors are not perfect substitutes across the markets
guns are harder to make than butter
guns have a higher price than butter
12
Where is the new equilibrium?
A
D
C
B

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