Microeconomics quiz

Multiple choice questions from january series

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  • Created by: Sophie
  • Created on: 27-04-13 18:25

1. which one is an appropriate form of govt intervention for the problem identified

  • imposition of a max price for a merit good
  • introduction of pollution permits to limit positive externalities
  • the use of buffer-stock scheme to stabilise the price of a public good
  • the provision of a subsidy for a product which generates negative externalities
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2. what is a defining characteristic of a merit good?

  • it is always provided free to consumers
  • it may be provided by the free market but not in sufficient quantities
  • once the good had been supplied to one consumer, there is no extra cost in supplying it to others
  • it tends to be provided by the govt because of the problem of non-exludability

3. the income elasticity of demand for bus travel is -2.0. this means that

  • as unemployment falls, more people will use their local buses
  • bus travel is an inferior good
  • buses are likely to have a negative cross elasticity of demand
  • a 10% increase in fares will lead to a 20% decrease in passengers

4. in a buffer-stock scheme

  • an organisation might buy in the open market to maintain a minimum price in the market for a product
  • buffer stocks are sold when there are surpluses in the market,
  • buffer stocks are kept to sell if the price of the product starts to fall
  • governments restrict supplies of a product coming onto an open market in order to lower prices of the product

5. Choice is an important element in the basic economic problem because

  • incomes are distributed unequally
  • high demand leads to high prices
  • limited resources have alternative uses
  • wants increase with income

Comments

davidsalter

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This 10 question multiple choice quiz tests several aspects of unit 1 micro economics and could provide a relief from intensive reading as well as a guide to areas still needing revision.

Nimrahkhan

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Not easiest resource but 0k for basic revision

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