Economics section A

This is based on all choice questions from unit 1 of microeconomics. Most of these questions are from many different past papers. 

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1. There is an output gap when

  • productivity is continuously higher in one country than in another.
  • the economy is continuously producing more capital goods than consumer goods over a period of time.
  • national output is higher or lower than it would have been if the country had grown continuously at its trend rate of growth.
  • unemployment occurs because the rate of economic growth increase above its trend rate of growth.
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2. The price elasticity of supply of a product will depend on

  • the availability of factors of production.
  • the incomes of consumers.
  • whether the product is a luxury or a necessity.
  • the extent to which the product is advertised.

3. An increase in imports of consumer goods is most likely to have been caused by a

  • rise in household disposable income.
  • rise in direct taxation.
  • fall in the exchange rate.
  • rise in household saving.

4. Good X is an inferior good. A rise in consumers' income is likely to lead to:

  • A rise in demand and an increase in market price and quantity sold.
  • A fall in demand and an fall in market price and quantity sold.
  • An expansion of market supply following an increase in demand.
  • A fall in demand and an increase in market price and quantity sold.

5. economics is primarily concerned with the study of

  • how new wants and economic resources are produced.
  • allocating scare resources to satisfy unlimited wants.
  • how to make more effective use of resources through reducing wants.
  • determining how the government should allocate resources.

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