Under the law of supply

As price increases Qs increases

The community surplus =

Producer + Consumer surplus at the market equilibrium

With regards to Qd = a-bP, a represents

The quantity demanded when the price is zero

The market clearing price is reached

Advancements in technology will cause

The supply curve to shift to the right

The consumer surplus is represented by...

The triangle above the equilibrium price

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The basics of economics

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Questions 20

Answers

1
The unemployment rate in China in 2009 was 4.2%
Normative statement
Positive statement
2
Under the law of supply
As price increases Qs decreases
As price increases Qs increases
As price increases Qs remains the same
3
A natural disaster affecting coffee plantations in Brazil will result in
An increase in Qd
Excess demand
Excess supply
No change in market equilibrium
4
All decisions regarding what, how and who to produce for a made by the government
Mixed economy
Centrally planned economy
Free market economy
5
Which of the following is an example of an inferior good
Apple iPhone X
Safeway own brand soup
Coca-cola
Volkswagen Jetta
6
Printers and ink cartridges are examples of
Substitutes
Unrelated goods
Compliments
Giffen goods
7
In the formula Qd = a -bP, if parameter b increases from 10 to 20 the demand curve
Gets steeper
Gets shallower
Shifts in a parallel motion
Remains the same
8
The community surplus =
The producer surplus at the market equilibrium
Producer + Consumer surplus at the market equilibrium
Producer + Consumer surplus with excess supply
Producer + Consumer surplus with excess demand
9
With regards to Qd = a-bP, a represents
The price
The slope of the curve
The quantity demanded when the price is zero
The price elasticity of demand
10
If demand shifts to the left and the price remains at Pe there will be
Excess demand
Market clearing
Excess supply
Market equilibrium
11
A movement along the supply curve is caused by
An increase in the costs of production
Improvements in technology
A decrease in corporate taxes
A change in price
12
Where Qd = Qs
The price mechanism has been achieved
The market is in disequilibrium
The market clearing price is reached
There is excess demand
13
The next best decision foregone when an economic decision is made
Scarcity
Choice
Opportunity cost
Basic economic problem
14
If the price of a substitute, Coca-Cola increases the demand curve for Pepsi should
Shift to the left
Result in a movement along the curve
Shift to the right
Result in no change to demand
15
An increase in the price of toilet paper has no impact on the demand for pencils meaning
These goods are compliments
These goods are substitutes
These goods are unrelated
These goods are Veblen goods
16
Advancements in technology will cause
The supply curve to shift to the right
No change in the supply curve
A movement along the supply curve
The supply curve to shift to the left
17
When an economy is operating at a point on the PPC curve
Inefficiency
Allocative efficiency
Economic growth
Technical efficiency
18
The consumer surplus is represented by...
The triangles above and below the equilibrium price
The triangle above the equilibrium price
The triangle below the equilibrium price
The market equilibrium
19
If supply shifts to the left in order to eliminate excess demand the price must
Remain the same
Decrease
Be discounted for a week
Increase
20
All of the machinery the business owns
Land
Enterprise
Labour
Capital

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