1. Good X is an inferior good. A rise in consumers' income is likely to lead to:
- A fall in demand and an fall in market price and quantity sold.
- A fall in demand and an increase in market price and quantity sold.
- An expansion of market supply following an increase in demand.
- A rise in demand and an increase in market price and quantity sold.
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2. What are goods provided by the government for people who are deemed to need them called?
- Positive externalities.
- Negative externalities.
- Merit goods.
- Demerit goods.
3. In a market based economy the scarcity of factors of production means that
- consumers must inevitably consider the opportunity cost of their choices.
- the economy cannot produce on its production possibility frontier.
- inflation is inevitable.
- the economy cannot achieve economics growth every year.
4. Which one of the following is a measure of productivity?
- the total amount of output produced each month.
- output divided by employment.
- the annual percentage increase in production.
- the quantity of capital equipment used divided by its price.
5. What are the two only free goods?
- Sunlight and air.
- Fuel and water.
- Chocolate and Phones.
- Paper and wood.