Economics Quiz

28 Questions | Total Attempts: 30

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Economics Quizzes & Trivia

Quiz on Economics


Questions and Answers
  • 1. 
    What are the 3 Factors of Production?
    • A. 

      Land/Work/Revenue

    • B. 

      Land/Labour/Revenue

    • C. 

      Labour/Capital/Land

    • D. 

      Capital/Work/Primary Goods

  • 2. 
    What is the Production Possibility Curve?
    • A. 

      Curve showing Supply and Demand

    • B. 

      Curve showing all possible combinations of all goods that a country can produce

    • C. 

      Curve showing the possible combinations of two goods that a country can produce with in a specified time with all resources employed.

    • D. 

      Shows what a country can produce with all resources fully employed

  • 3. 
    What does Production Possibility Curve NOT show us?  
    • A. 

      Opportunity costs

    • B. 

      Marginal costs

    • C. 

      Increasing/decreasing opportunity costs

    • D. 

      Growth in potential output

  • 4. 
    Law of Demand states:
    • A. 

      As prices rise the quantity demanded rises

    • B. 

      As prices rise the quantity demanded falls

    • C. 

      As supply increases demand increases

    • D. 

      As supply increases demand decreases

  • 5. 
    Shift ALONG a demand curve is caused by:
    • A. 

      Price

    • B. 

      Fashion

    • C. 

      Income

    • D. 

      Supply

  • 6. 
    Shift IN THE demand curve is NOT caused by:
    • A. 

      Tastes

    • B. 

      Price of substitute goods

    • C. 

      Price of complementary goods

    • D. 

      Price of the product

  • 7. 
    As prices rise, the quantity supplied increases is…
    • A. 

      Law of Demand

    • B. 

      Shift in supply curve

    • C. 

      Shift in demand curve

    • D. 

      Law of Supply

  • 8. 
    Shift in supply can be caused by a number of:  (tick all that correct)
    • A. 

      Costs of production

    • B. 

      Profitability of alternative products

    • C. 

      Profitability of goods in joint supply

    • D. 

      Nature and other random shocks

    • E. 

      Aims of producers

    • F. 

      Expectations of producers

    • G. 

      All of the above

  • 9. 
    Where Demand Equals Supply is: (tick all that correct)
    • A. 

      Equilibrium Revenue

    • B. 

      Equilibrium Costs

    • C. 

      Equilibrium Price

    • D. 

      Equilibrium Output

  • 10. 
    What happens to the Equilibrium if both Demand and Supply shift right?  QD = Quantity Demanded P = Price
    • A. 

      – Decreased QD, Same P

    • B. 

      – Decreased P, Same QD

    • C. 

      – Increased QD, Same P

    • D. 

      – Increased P, Same QD

  • 11. 
    Formula: %DQd / %DP is:
    • A. 

      Formula for Elasticity

    • B. 

      Formula for Price

    • C. 

      Formula for Price Elasticity of Supply

    • D. 

      Formula for Price Elasticity of Demand

  • 12. 
    >1 means... <1 means... =1 means...
  • 13. 
    Elastic Demand:
    • A. 

      Revenue falls as price falls

    • B. 

      Revenue falls as demand falls

    • C. 

      Revenue rises as price rises

    • D. 

      Revenue falls as price rises

  • 14. 
    Destabilising Speculation:
    • A. 

      When producers sell more to make a greater revenue

    • B. 

      When buyers buy more (buying in bulk)

    • C. 

      When buyers/sellers believe a change in price means similar changes in the future

    • D. 

      When buyers/sellers believe a change in price is only temporary

  • 15. 
    Short Run Production:
    • A. 

      When all factors (fixed and variable factors of production) remain the same

    • B. 

      When at least one factor remains the same

    • C. 

      When no factors of production are the same

    • D. 

      When only fixed factors remain the same.

  • 16. 
    Law of Diminishing Returns
    • A. 

      When one extra unit of a variable factor will produce less extra output than the previous unit

    • B. 

      When the company or firm produces less

    • C. 

      When a firm begins to lose money

    • D. 

      When one extra unit of a fixed factor will produce less extra output than the previous unit

  • 17. 
    Average Physical Product
    • A. 

      APP = TPP/QV

    • B. 

      APP = TPP/QV

    • C. 

      APP =MPP/Lb

    • D. 

      APP = TTP/Lb

  • 18. 
    Law of Diminishing Returns
    • A. 

      When one extra unit of a variable factor will produce less extra output than the previous unit

    • B. 

      When the company or firm produces less

    • C. 

      When a firm begins to lose money

    • D. 

      When one extra unit of a fixed factor will produce less extra output than the previous unit

  • 19. 
    Average Physical Product
    • A. 

      APP = TPP/QV

    • B. 

      APP = TPP/QV

    • C. 

      APP =MPP/Lb

    • D. 

      APP = TTP/Lb

  • 20. 
    What is - DTPP/DQV 
    • A. 

      Total Revenue

    • B. 

      Marginal Physical Product

    • C. 

      Marginal Physical Costs

    • D. 

      Total Fixed Costs

  • 21. 
    What are the characteristics of Perfect competition?
    • A. 

      A – firms are price takers

    • B. 

      B – Free entry into the market

    • C. 

      C – Homogenous Products

    • D. 

      D – One large company dominating the market

    • E. 

      E – Perfect Knowledge

    • F. 

      F – Imperfect Knowledge

    • G. 

      G – Differentiated products

  • 22. 
    Which one is NOT a barrier to entry in a Monopoly?
    • A. 

      A – Economies of scale

    • B. 

      B – Legal restrictions

    • C. 

      C – Easy access to key resources/labour

    • D. 

      D – Product differentiation

  • 23. 
    Monopolies encourage risk taking
    • A. 

      True

    • B. 

      False

  • 24. 
    Companies in monopolistic competition markets can make supernormal profit in the long-term
    • A. 

      True

    • B. 

      False

  • 25. 
    Which of these is NOT an advantage of Monopolistic competition
    • A. 

      A – Waste is insignificant as demand is highly elastic

    • B. 

      B – Firm may gain economies of scale

    • C. 

      C – Consumers benefit from the variety of products to choose from

    • D. 

      D – No excess capacity

  • 26. 
    What is an Oligopoly?
    • A. 

      A – A few large firms dominating the market with large barriers to entry.

    • B. 

      B – A few large firms dominating the market with little or no barriers to entry

    • C. 

      C – A few large firms dominating the market but no not compete using marketing

    • D. 

      D – One large firm dominating the market

  • 27. 
    What is tacit collusion?
    • A. 

      A – Agreement where there is a formal agreement on a fixed price or an exact quota

    • B. 

      B – When firms have written rules of collusive behavior and price leadership

    • C. 

      C – The formation of cartels

    • D. 

      D – When firms have unwritten rules of collusive behavior and price leadership

  • 28. 
    What are the two assumptions of the kinked demand curve theory? (tick all that correct)
    • A. 

      A – If the firm reduces its prices, others will not do the same

    • B. 

      B – If the firm raises its prices, other in the market will do the same

    • C. 

      C – If the firm raises its prices, other in the market wont

    • D. 

      D – If the firm reduces its prices, others will feel forces to do the same