1. When an economy operates on its production possibility frontier (PPF), it is
- maximising the profits of producers.
- productively efficient.
- satisfying all the economics wants of consumers.
- not producing demerit goods such as cigarettes.
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2. A Demerit good is:
- a good that are needed to make other good.
- seen as undesirable, over produced and over priced.
- unaffordable, under priced and under produced.
- goods people would not come together to pay for if in a free market economy.
3. What are goods provided by the government for people who are deemed to need them called?
- Negative externalities.
- Merit goods.
- Positive externalities.
- Demerit goods.
4. 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.
5. What are the two only free goods?
- Paper and wood.
- Sunlight and air.
- Chocolate and Phones.
- Fuel and water.