Assignment

1
Economics is the study of
A)
production technology
B)
consumption decisions
C)
how society decides what, how, and for whom to produce
D)
the best way to run society

2
A resource is scarce if supply exceeds demand at zero price
A)
TRUE
B)
FALSE

3
The opportunity cost of a good is
A)
the time lost in finding it
B)
the quantity of other goods sacrificed to get another unit of that good
C)
the expenditure on the good
D)
the loss of interest in using savings

4
A market can accurately be described as
A)
a place to buy things
B)
a place to sell things
C)
the process by which prices adjust to reconcile the allocation of resources
D)
a place where buyers and sellers meet

5
A command economy decides resource allocation by government planning
A)
TRUE
B)
FALSE

6
In a free market __________ ___________
A)
governments intervene
B)
governments plan production
C)
governments interfere
D)
prices adjust to reconcile scarcity and desires

7
In the mixed economy
A)
economic problems are solved by the government and market
B)
economic decisions are made by the private sector and free market
C)
economic allocation is achieved by the invisible hand
D)
economic questions are solved by government departments

8
Positive economics studies objective explanations of the workings of the economy
A)
TRUE
B)
FALSE

9
Normative economics forms ___________ based on _____________
A)
positive statements, facts
B)
opinions, personal values
C)
positive statements, values
D)
opinions, facts

10
Microeconomics is concerned with
A)
the economy as a whole
B)
the electronics industry
C)
the study of individual economic behaviour
D)
the interactions within the entire economy

11
Macroeconomics is the study of ___________________
A)
individual building blocks in the economy
B)
the relationship between different sectors of the economy
C)
household purchase decisions
D)
the economy as a whole

12
An economic model is a physical representation of an economy
A)
TRUE
B)
FALSE

13
Data are important in economics because __________ and __________
A)
they suggest relationships for explanation, allow testing of hypotheses
B)
they can be used for tables, they can be graphed
C)
they can be used in computers, governments use them
D)
they provide interesting information, can be summarised

14
Time series data show information
A)
about the same point in time over different places
B)
about different points in time over the same variable
C)
about different variables over different places
D)
about different points in time over different places

15
Index numbers express base data in relation to some relative value
A)
TRUE
B)
FALSE

16
The retail price index is used to ______________
A)
construct price lists
B)
compare shop prices
C)
measure changes in the cost of living
D)
none of the above

17
A real value can be derived from a nominal value by
A)
adjusting for changes over time
B)
adjusting for data collection errors
C)
adjusting for population changes
D)
adjusting for changes in prices

18
To find the percentage change in a number, divide the absolute change by the original number and multiply by 100
A)
TRUE
B)
FALSE

19
If your income during one year is £10,000 and the following year it is £12,000, then it has grown by
A)
20%
B)
2%
C)
12%
D)
16%

20
A straight-line diagram can be drawn knowing the ______ and _________
A)
vertical axis and horizontal axis
B)
intercept and slope
C)
scale and slope
D)
intercept and scale

21
On a graph, a positive linear relationship
A)
moves down to the right
B)
moves up to the left
C)
moves up to the right
D)
moves down to the left

22
If the diagram of a line shows that lower values on the vertical scale are associated with higher values on the horizontal scale, this is an example of _____________
A)
a nonlinear relationship
B)
a positive linear relationship
C)
a scatter diagram
D)
a negative linear relationship

23
When we know the quantity of a product that buyers wish to purchase at each possible price, we know
A)
Demand
B)
Supply
C)
Excess demand
D)
Excess supply

24
Supply is the quantity of a good sellers wish to sell each time the market opens
A)
TRUE
B)
FALSE

25
The equilibrium price clears the market; it is the price at which ________ _________
A)
Everything is sold
B)
Buyers spend all their money
C)
Quantity demanded equals quantity supplied
D)
Excess demand is zero
E)
c and d

26
When a market is in equilibrium
A)
Quantity demanded equals quantity supplied
B)
Excess demand and excess supply are zero
C)
The market is cleared by the equilibrium price
D)
All of the above

27
________ and ________ do not directly affect the demand curve
A)
the price of related goods, consumer incomes
B)
consumer incomes, tastes
C)
the costs of production, bank opening hours
D)
the price of related goods, preferences

28
A change in price can cause a shift of a demand curve
A)
TRUE
B)
FALSE

29
A demand curve can shift because of changing
A)
incomes
B)
prices of related goods
C)
tastes
D)
all of the above

30
A supply curve is directly affected by
A)
technology
B)
input costs
C)
government regulation
D)
all of the above

31
An increase in price will cause a supply curve to shift to the left
A)
TRUE
B)
FALSE

32
If a price increase of good A increases the quantity demanded of good B, then good B is a
A)
substitute good
B)
complementary good
C)
bargain
D)
inferior good

33
An increase in consumer income will increase demand for a _______ but decrease demand for a _________
A)
substitute good, inferior good
B)
normal good, inferior good
C)
inferior good, normal good
D)
normal good, complementary good

34
Price ceilings are imposed increase price above the free market equilibrium priceA)
TRUE
B)
FALSE.