Flashcard Deck 1
The basic difference between macroeconomics and microeconomics is:
A. Microeconomics concentrates on individual markets while macroeconomic focuses on international trade
B. Microeconomics concentrates on the behaviour of individual consumers while macroeconomics focuses on the behaviour of firms.
C. Microeconomics concentrates on the behaviour of individual consumers while macroeconomics focuses on the behaviour of the entire economy
C. Microeconomics concentrates on the behaviour of individual consumers while macroeconomics focuses on the behaviour of the entire economy
Which of the following statements most likely lies within the real or micro economics?
A. Unemployment rises during a recession and falls during a expansion
B. An increase in government spending will increase the aggregate demand for goods and services in the economy
C. A rapid acceleration of the supply of money may create inflation
D. An increase in labour costs will increase the additional costs of building another bus
D. An increase in labour costs will increase the additional costs of building another bus
Which of the following is most likely a topic of discussion for macroeconomics?
A. Am Increase in the price of a hamburger
B. A decrease in the production of dvd players by a consumer electronics company
C. An increase in the wage rate paid to automobile workers
D. A decrease in the unemployment rate
D. A decrease in the unemployment rate
The circular flow diagram of economic activity is a model of the:
A. Flow of goods, services and payments between a household and firms
B. Influence of government on businesses behaviours
C. Role of unions and government in the economy
A. Flow of goods, services and payments between a household and firms
What is the definition of opportunity cost
Opportunity cost - the cost of an activity measured in terms of the best alternative forgone
A ticket in the raffle in which the prize is a day trip to Paris is purchased for £1. The regular price for this for this trip is £200 but the organisers of the raffle are offering a cash sum of £150 to the winner instead of the trip. What will be the opportunity cost if they decide to go on the trip.
£150
If the consumer price index went up from 125 to 130 over 12 months what would be the rate of inflation over that period?
A.4%
B.5%
C.3%
D.2%
A. 4%
What happens when quantity demanded decreases in response to a change in price?
A. The demand curve shifts to the right
B. The demand curve shifts to the left
C. There is no movement down along the demand curve
D. There is a movement up along the demand curve
D. There is a movement up along the demand curve
After widespread press reports about the dangerous of contracting a disease by consuming beef Canada. The likely economic effect on the US demand curve for beef Canda is?
A. No change only the supply curve for beef is likely to be affected
B. A shift of the demand curve for need to the left
C. A movement down along the demand curve for beef to the right
D. A shift of the demand curve to the right
B. A shift of the demand curve for need to the left
A serve feeeze has once again damaged the florida orange crop. The impact on the market for orange juice will be a leftward shift of:
A. The supply curve
B. The demand curve as consumers try to save because of the shortage
C . Both the supply and demand curves
A: the supply curve
Andy views beer and pizza as components to one another. If the price of a pizza decreases economists would expect:
A. Andy’s demand for pizza to increase
B. Andy’s demand for pizza to decrease
C. Andy’s quantity of pizza demanded to decrease
D. Andy’s demand for beer to increase
D. Andy’s demand for beer to increase
Interpret the following statement “an increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market.”
A. The statement is correct
B. The statement would be correct if the quantity of wheat demanded were substituted for quantity of wheat supplied
C. The statement is incorrect because it confuses a change in quantity supplied with a change in supply
D. The statement would be correct if it read that a “decrease in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market.”
A. The statement is correct.
Price elasticity of demand is defined as:
A. The slope of the demand curve
B. The slope of the demand curve divided by price
C. The % change in price / by the % change in quantity demanded
D. The % change in quantity demanded / by the % change in price
D. The percentage change in quantity demanded / percentage change in price
Billy’s barbershop knows that a 5% increase in the price of haircuts results in a 15% decrease in demand. What is the elasticity of demand?
A. 0.15
B. 3.0
C. 0.10
D. 0.05
B. 3.0
If a family spends a large part of its total budget on food , then it’s demand for food tends to be
A . Cannot tell from given information
B. Perfectly elastic
C. Unitarily elastic
D. Inelastic
E. Elastic
E. Elastic
