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6. Productive efficiency means:
- increasing profit
- reducing the time allocated to a production process
- using production techniques that do not waste resources
- increasing variable costs
- increasing output by increasing input
7. 'substitutes' are:
- goods which are bought as alternatives to the good in question
- goods which you buy more of as their price rises
- goods which are bought in conjunction with the good in question
- goods which are surplus to requirements
- none of the above
8. A marginal utility curve:
- is always a straight line
- is concave to the origin
- shows the extra satisfaction from consumption of one more unit of good
- shows how quantity demanded varies with changes in price
- shows cumulative satisfaction from consumption of successive units of a good
9. Which of the following will restrict competition in an industry?
- high prices
- freedom of entry and exit
- advertising
- barriers to the entry of new firms
- low prices
10. In the event of excess supply over demand the price will:
- not change
- fall then rise
- fall
- rise
- rise then fall
11. The desire to buy a good backed by the ability to do so, is:
- a demand schedule
- total demand
- effective demand
- a demand curve
- perverse demand
12. A production possibility curve illustrates:
- maximum production of two outputs from a given resource input
- combinations of factors required to produce a given output
- the labour and capital available to a producer
- maximum possible economic growth
- factors available from a given cost outlay
13. Which of the following will not cause a shift in the demand curve for new houses?
- a rise in council rents
- a discount of £10,000 on the price of new houses
- a fall in private sector rents
- a rise in the income of potential buyers
- a fall in the popularity of home ownership
14. Which of these statements is a valid criticism of the price-system?
- it cannot provide luxury goods
- it may lead to great inequality of income and wealth
- it will often lead to shortages of goods and services
- it cannot secure the allocation of goods and services
- long queues for necessities are likely
15. If administration and/or communication becomes more difficult and costly in a very large firm, this is an example of:
- Diseconomies of scale
- Over-capacity
- Internal economies of scale
- Increasing returns
- External economies of scale
16. Opportunity cost is related to:
- the cost of a substitute
- marginal cost
- forgone alternatives
- total revenue
- average cost
17. In a supply function the relationship between the price and quantity supplied is
- constant
- linear
- direct
- inverse
- unclear
18. A 'demand' schedule:
- is always a straight line
- none of the above
- sets out amounts demanded at various prices within a set time period
- shows diagrammatically how demand changes with income
- is a particularly difficult itinerary
19. Movement along the demand curve is caused by a change in
- price
- income
- expectation
- supply
- quality
20. Fixed costs in the short run
- must be greater than revenue
- vary with output
- are fixed by the government
- do not vary in direct proportion to output
- include variable costs