Mini-quiz 1

1. The motor insurer takes into account which of the following risk factors when setting the motorist’s premium:-

Make, Model and Age of Vehicle

Age, Gender and Occupation of motorist

Claims history of motorist

All of the above

2. An old factory is forced by the government to install anti-pollution devices. Which of the following outcomes is a result of this action?

An increase in social costs and a reduction in negative externalities

An increase in private costs and a reduction in negative externalities

An increase in both social costs and negative externalities

An increase in both private costs and negative externalities

3. What is the role of International Monetary Fund (IMF)?

To help poorer countries with their economic development

To maintain international financial stability in global financial markets

To settle industrial and trade disputes between members

To implement and advance global trade agreements

4. The G20 is a group of the world's most powerful countries that together represent 85% of the world's economy. Which of the following is not one of the G20 countries?

South Africa

Saudi Arabia

Indonesia

None of the above

5. How does the impact of a tariff differ from that of an import quota?

A tariff always generates tax revenues to the government while a quota does not

A tariff affects the domestic price of a commodity while a quota does not

A tariff disadvantages consumers while a quota does not

A tariff encourages increased domestic production, while a quota does not

6. Adam and Eve are painting some railings together. Eve can strip the old paint from 15 metres of railing per hour or paint 7.5 metres of railing per hour. Adam can strip 20 metres or paint 5 metres per hour. Which of the following is true?

Adam has an absolute advantage in both activities

Eve has a comparative advantage in paint stripping

For Adam, the opportunity cost of stripping the paint from 1 metre of railings is painting 4 metres of railings

For Eve, the opportunity cost of painting 1 metre of railings is stripping 2 metres of railings