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Edexcel AS Economics - Theme 1 Flashcards | StudBud
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Edexcel AS Economics - Theme 1
Edexcel AS Economics - Theme 1
34 terms
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#economics #microeconomics #edexcel
Flashcards
34 cards
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Practice quiz
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Questions
34
Answers
1
Which of the following would cause the demand curve to shift left?
A rise in real incomes
A rise in price of a complement good
A rise in price of a substitute good
A rise in price of the good
2
The social equilibrium is when...
MPB = MPC
MSC = MSB
MSB = MPB
3
Opportunity cost is...
...the next best alternative forgone
...the best alternative that is chosen
...the next best alternative
4
Excess demand occurs at a price level...
above the equilibrium
below the equilibrium
5
Positive externalities exist when...
MSC>MSB
MPB>MPC
MSC<MSB
MPC>MPB
6
The price elasticity of demand will determine whether...
a change in demand will change price
a change in the price will change revenue/expenditure
7
Which statement is false about Free Market economies?
Hong Kong and the USA are the closest examples
Resources are allocated by the price mechanism
There are high levels of inequality
There is a limited choice of goods and services
8
In reference to rational decision making, which of the following is false?
Governments aim to maximise welfare of citizens
Firms aim to maximise profits
Consumers aim to maximise utility
Consumers aim to maximise income
9
Which of the following statements is false about specialisation?
...gives rise to large gains in productivity
...leads to unit costs of production reducing
...has no disadvantages
...is the production of a limited range of goods by a firm
10
Who invented the term 'the invisible hand'?
Adam Smith
Karl Marx
Friedrich Hayek
11
Positive statements...
...deal with value judgements.
...cannot be refuted or supported.
...can be refuted or supported.
12
Public goods are ...
non excludable and rival
rival and excludable
rival and non excludable
non rival and non excludable
13
VAT is an example of...
a specific tax
an ad valorem tax
14
Economic growth will...
...cause a movement along the PPF
...mean production is taking place inside the PPF
...shift the PPF outwards.
...shift the PPF inwards
15
A market where the market mechanism fails to supply any of a good is called...
partial market failure
missing market
market failure
16
Normative statements...
...can be proven true or false.
...can be refuted or supported.
...deal with value judgements.
17
Scarcity occurs because...
...wants and needs are limited but resources are infinite
...wants and needs are unlimited but resources are limited
....wants are needs are finite but resources are unlimited
...wants and needs are infinite but resources are unlimited
18
Which of the following statements is false?
Complements have positive cross elasticities
Inferior goods have negative income elasticities
Normal goods have positive income elasticities
Substitutes have positive cross elasticities
19
When will the incidence of tax fall wholly on the consumer?
When demand is perfectly elastic
When supply is perfectly elastic
20
An extension of demand is when...
the quantity demanded falls
the quantity demanded rises
21
Government failure occurs when...
there is a significant level of market failure
government intervention leads to a net welfare gain
government intervention leads to a net welfare loss
22
Which of the following is not a factor of production?
Labour
Enterprise
Capital
Technology
23
Which of the following is not a function of money?
Method of deferred payment
Store of value
Medium of exchange
Legal tender
24
Producer surplus is the difference between the...
price a firm would supply at and the price they receive
quantity a firm could supply and what they actually supply
25
Which of the following is not a reward to the owners of the factors of production?
wages
dividends
rent
interest
26
A increase in the price of the good will cause the demand curve to...
do nothing! There will be a movement along the demand curve.
shift to the right
shift to the left
27
Which of the following is not a determinant of PES?
Availability of substitutes
Price of the good or service
Ease of factor substitution
Time available to supply the good/service
28
Consumer surplus is the difference between...
the quantity a consumer could buy and what they actually buy
the price a consumer would pay and what they actually pay
29
The PPF does not show...
...what an economy could produce
...the demand of two goods
...the opportunity cost of producing one good over another
...the maximal potential output of an economy
30
Which of the following is not a function of the price mechanism?
Rationing
Price determination
Signalling
Incentives
31
Maximum prices are set below the free market price. True or false?
True
False
32
In mixed economies...
all resources are controlled by the government
more resources are allocated by the gov than in free markets
all resources are allocated by the price mechanism
there is no welfare state
33
MSC = MPC + externality. True or false?
False
True
34
Ceteris paribus does not mean...
...when variables are kept constant
...all things being equal
...when variables in the economic environment are inconstant
