Question 1 of 8opportunity cost / production possibility
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What is the opportunity cost to a fully employed economy of increasing capital investment?
The diagram shows an economy's production possibility curve. What is the effect on present and future total output of a move from Z to point X?
The quantity supplied is
The price of a product rises from $18 000 to $22 000 and demand falls from 4 000 to 3 000. Calculate the coefficient of the price elasticity of demand.
The short-run supply curve of a perfectly competitive firm is the
What is marginal revenue?
The diagram represents the market for maize. What might shift to ?
To minimize loss, a firm must produce that output which
Which of the following is the payment to a factor of production over and above that necessary to keep the factor in its present use?
Normal profit is earned by an organisation when
A favourable movement in the terms of trade implies that the
National income is calculated by
The economic growth of a country may be deduced from an increase in its
Dumping is the practice of
The following figures are based on a country's balance of payments account.
Which characteristic applies to a mixed economy?
If nominal value of income rises by 20% and the amount of money in circulation remains the same, then
The table shows national income, rates of population and inflation changes for countries A, B, C and D.
Faced with unemployment, government decides to increase expenditure on goods and services. What situation yields the greatest increase in output in the economy?
In an open economy.
In a capitalist society, the economic problem of 'what goods' shall be produced is solved primarily by
Which of the following statements is correct?
In a typical demand schedule, quantity demanded
The diagram shows supply curves for commodity X. The shift of the supply curve from to could be caused by
The diagram shows the market demand for red meat. The movement from to can be the result of
The diagram shows the market demand and supply of a commodity. Where price is set by government,
A stable equilibrium position is one in which
By saying a good has utility, it means
Marginal utility is the
Which of the following is a positive statement?
Which of the following could cause a shift of the demand curve from to ?
The basic economic problem is that
The diagram below shows the Production Possibility Curve (PPC) of a country X. [Diagram: potatoes on the vertical axis with levels c, d and b marked from the top down, and bread on the horizontal axis with levels e and a marked. The concave PPC runs from c on the potatoes axis down to the bread axis. Point F sits on the curve at potato level d and bread level e; point G sits on the curve at potato level b and bread level a.]
Which of the following is an advantage of free market economy?
The diagram below shows the transformation curve of an economy
A straight line production possibility curve displays
Opportunity cost means
The diagram shows two production possibility frontiers, JK and PQ, before and after technological progress has taken place.
A concave production possibility curve (PPC) illustrates that
Productive efficiency is achieved when
If a consumer gains 30 units of satisfaction from consuming 6 units of a commodity and 33 units from consuming 7 units. The consumer's marginal utility from the 7th unit is
A maximum price (price ceiling) set by the government in a market is only effective in altering the market outcome if it is set...
The Bulawayo Public Transport Association is made up of a small number of commuter omnibus operators who coordinate to charge similar fares along shared routes, resembling a cartel arrangement. This is most consistent with which market structure?
According to the table of Zimbabwe's national income data for 1980 to 1990, as Net Government Current Expenditure rose over the period, GDP...
In economics, define the term 'excess demand'.
According to the passage, international crude oil prices rose from US$44 per barrel in January 2005. Which price mark did they break through by August 2005?
What is Gross Domestic Product (GDP)?
The construction industry contributes an average of 2.4% to Gross Domestic Product (GDP) but 4.5% to total formal employment. Which of the following best explains this difference?
In economics, the term 'terms of trade' refers to
The article states that Indian and Chinese economic growth 'dampened world inflation pressures, lowered global interest rates, and raised raw material prices', and that this 'helped to improve Africa's terms of trade'. Which of the following describes one of the effects reported in the article?
Gross National Product per capita is best described as
In 2005 Malawi had a GNP per capita of US$720 and a life expectancy at birth of 46 years, while Spain had a GNP per capita of US$28 030 and a life expectancy of 81 years. Across a wide sample of countries this pattern shows that
Which feature of a market made up of a few large supermarket chains is the clearest evidence that it is an oligopoly?
Which of the following is a form of non-price competition used by firms in an oligopoly?
The multiplier effect describes the way in which
The main reason banks lend small and medium enterprises far less than those firms want to borrow is that
State the term for a systematic record of all economic transactions between the residents of a country and the rest of the world over a period, usually one year.
State the term for the situation in which the value of a country's visible imports exceeds the value of its visible exports over a period.
State the term for the weighted index number that measures the average change over time in the prices of a representative basket of goods and services bought by a typical household.
Annual inflation fell from 46,6% in December 1998 to 44,2% in January 1999 even though prices rose by 3,8% during January itself. The best explanation is
Income elasticity of demand measures the responsiveness of quantity demanded of a good to a change in
In a UK survey of income elasticities (1998-2000), liquid whole milk had an income elasticity of demand of -0.17, while fish had an income elasticity of demand of +0.27. Based on these figures, liquid whole milk is classified as
A survey found food overall has an income elasticity of demand of +0.20: a 10 percent rise in income raises the quantity of food demanded by only about 2 percent. As household income grows over time, this low income elasticity means that spending on food as a proportion of total household expenditure will
An inferior good is one with a negative income elasticity of demand: quantity demanded falls as income rises. When the price of such an inferior good falls, the substitution effect alone (real income held constant) causes quantity demanded of that good to
For that same inferior good, a fall in its price also raises the consumer's real income. Because the good is inferior, this income effect on its own causes quantity demanded to
In a planned (command) economy, decisions about what to produce, how to produce it, and for whom it is produced are made primarily by...
The principle stating that as a consumer consumes successive additional units of a good, the extra utility gained from each additional unit falls is called the law of ___.
In a perfectly competitive market, supernormal profits earned by firms in the short run attract new entrants, and competition drives price down in the long run until firms earn only ___ profit.
Which market structure allows firms to go on earning supernormal profits in the long run, because significant barriers prevent new firms from entering to compete the profits away?
In a planned (command) economy, decisions about what, how, and for whom to produce are made primarily by...
National income comparisons between countries are often adjusted for differences in relative price levels and the cost of living, using an adjustment known as ______.
The classical economist credited with developing the theory of comparative advantage in international trade was ______.
According to the theory of comparative advantage developed by David Ricardo, a country should specialise in producing and exporting the good for which it has...
State the term for an economic system in which decisions about what to produce and at what price are made through the interaction of buyers and sellers responding to price signals, rather than through central government planning.
Which characteristic distinguishes a public good, such as street lighting or national defence, from a private good?
In the short run, at what point does a perfectly competitive firm choose to shut down production rather than continue operating?
At which price level does a perfectly competitive firm in the short run earn exactly normal profit, covering all its costs including the opportunity cost of capital, but no supernormal profit?
Which theory of wage differentials explains that a worker's wage reflects the value of their marginal contribution to a firm's output?
State the economic theory of wage differentials which holds that workers who invest more in their own education, training and skills earn higher wages as a result.
Opportunity cost is best defined as...
What is meant by the basic economic problem of scarcity?
In a free market economy, resources are primarily allocated through which of the following?
State the term for the mechanism that allocates resources in a market economy through the interaction of supply and demand, rather than through central government planning.
In discussions of the costs and benefits of firm size, 'diseconomies of scale' refers to which of the following?
Allocative efficiency in an economy is achieved when...
In economics, the basic economic problem describes a situation in which...
Which of the following is a role that government plays in a mixed economy?
A country that moves from a command economy to a market economy can expect efficiency to rise because
A mixed economy is one in which resources are allocated by
A firm that consistently deals honestly with its customers and suppliers benefits chiefly because
In a mixed economy, the question of what to produce is settled for ordinary private goods mainly by
In a free enterprise economy the question of what to produce is settled by