Two non-price factors affecting supply are:

technology /costs of production

The discovery of a new gas field off the Western Australian coast would result in

an increase in supply, creating a lower price for gas.

The Law of Demand states

As the price of a good rises, people buy less

deal with the buying and selling of goods and services

Which of the following would not affect the price elasticity of demand for a product?

the amount supplied by producers

A contraction in demand is caused by

an increase in the price of the good

A normal good is defined as a good for which demand increases as

the income of consumers increases

A “price floor” will create

A surplus in supply as producers attempt to maximise profits

Two things underpinning the Law of Demand are:

The income effect / the substitution effect

A shift to the left of a demand curve could be due to a

a rise in the price of a complement

How will price change eliminate a shortage?

As the price rises, the Qd decreases while the Qs increases

A price change will indicate

a movement along the demand curve

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ATAR Economics Unit 1 Revision (A) - Dale Christian School

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Short revision of ATAR Unit 1, Year 11 Economics. WA

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Questions 27

Answers

1
Two non-price factors affecting supply are:
expectations of producers / demographic factors
Prices of other goods a firm produces / demographic factors
technology /costs of production
technology / expectations of consumers
2
The discovery of a new gas field off the Western Australian coast would result in
a contraction of supply, creating a lower price for gas.
a decrease in supply, creating a higher price for gas.
an increase in supply, creating a lower price for gas.
an expansion of supply, creating a higher price for gas.
3
Which is incorrect? A competitive market is characterised by:
very similar products (homogeneous)
easy entry into the market
firms are price takers
two to three dominating firms
4
An increase in both the demand and the supply for tomatoes will cause the tomato market:
price to decrease
price to increase
quantity to increase
quantity to decrease
5
The Law of Demand states
The more supplied, the lower the price
The buying intentions of people
As the price of a good rises, people buy less
As the price of a good falls, people buy less
6
The statement, "high taxes on alcohol cause people to drink less", is:
both a positive and normative statement
a normative statement
a positive economic statement
purely gossip
7
Product markets
are an injection to the circular flow
deal with the buying and selling of goods and services
deal in the buying and selling of the factors of production
occur between firms and banks
8
Which of the following would not affect the price elasticity of demand for a product?
the number of substitutes available
the amount supplied by producers
the proportion of income required to purchase the product
the time it takes for consumers to respond to a price change
9
What immediate effect will a large increase in petrol prices have on motor scooters?
increase bus transportation usage
decrease bus transportation usage
increase their price
increase their demand
10
Which of the following would cause a contraction in demand for petrol?
a fall in the price of petrol
a switch to electric powered cars
a decrease in the level of real incomes
a rise in the price of petrol
11
The payments for the factors of production, Capital and land respectively, are:
Interest and rent
Wages and profit
Wages and rent
Rent and profit
12
Which of the following is not a non-price factor affecting demand?
Levels of disposable income
The price of unrelated goods
Demographic factors
Expectations of consumers
13
A contraction in demand is caused by
a decrease in the number of consumers
a negative change in market sentiment
an increase in the price of the good
an increase in the unemployment rate
14
A producer decides to increase the price on its inelastic good. Total revenue will?
It will rise.
It will fall.
It will fluctuate.
It will stay the same.
15
A normal good is defined as a good for which demand increases as
its price decreases
the number of consumers of the good increases
the price of a substitute increases
the income of consumers increases
16
A “price floor” will create
A contraction in supply as producers react to lower prices
A shortage in the production of output in relation to demand
An efficient allocation of resources and an undersupply
A surplus in supply as producers attempt to maximise profits
17
Two things underpinning the Law of Demand are:
Expectations of consumers / the income effect
The income effect / the substitution effect
The profit motive / the substitution effect
The income effect / the profit motive
18
According to the law of supply, an increase in price _____________ the quantity supplied
interrupts
stimies
increases
decreases
19
A shift to the left of a demand curve could be due to a
fall in the price of the good
a rise in the price of a complement
fall in the quantity supplied
rise in the price of a substitute
20
How will price change eliminate a shortage?
As the price falls, the Qd increases while the Qs decreases
As the price rises, the Qd increases while the Qs decreases
As the price falls, the Qd decreases while the Qs increases
As the price rises, the Qd decreases while the Qs increases
21
The change in price is 7%, the change in demand is 5%. This shows:
The good is inelastic
The good is elastic
The good is a compliment
The good is inferior
22
If the price of going to the movies increased, what would happen to the demand of popcorn?
increase
become more inelastic
stay the same
decrease
23
Which of the following is considered a necessity?
alcohol
bell-bottom jeans
bread
orange juice
24
A good for which the demand is unitary elastic, has a price elasticity coefficient:
Equal to one
Less than zero
Less than one
Greater than one
25
Which of the following products would have the lowest price elasticity of demand?
petrol
leisure airline travel
passenger motor vehicles
restaurant meals
26
Which would be considered compliments?
popcorn and movies
toothpaste and cars
pizza and homework
coke and pepsi
27
A price change will indicate
a movement along the demand curve
an increase or decrease in supply
a change in elasticity
an increase or decrease in demand

ATAR Economics Unit 1 Revision (A) - Dale Christian School Flashcards | StudBud