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. What are goods provided by the government for people who are deemed to need them called?

  • Positive externalities.
  • Negative externalities.
  • Merit goods.
  • Demerit goods.
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2. A multiple effect occurs when an initial change in government spending leads to a larger change in the level of

  • national income.
  • prices.
  • investment.
  • saving.

3. Which one of the following is a measure of productivity?

  • the annual percentage increase in production.
  • output divided by employment.
  • the quantity of capital equipment used divided by its price.
  • the total amount of output produced each month.

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. When an economy operates on its production possibility frontier (PPF), it is

  • satisfying all the economics wants of consumers.
  • productively efficient.
  • not producing demerit goods such as cigarettes.
  • maximising the profits of producers.


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