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Tutor2u - Microeconomic Revision Test (1)
Quiz by Koen De Mulder
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A indirect tax on the suppliers of a good usually
The price mechanism helps to allocate scarce resources efficiently because
The fundamental economic problem facing all countries is
A manufacturer of kitchen equipment reduces the prices of their standard models by 8% and as a result, the volume of sales of new kitchens rises by 6%. The price elasticity of demand for the good is
An advertising campaign aimed at differentiating a product from its only substitute was successful. What is likely to have happened to the price elasticity of demand for the product and the cross price elasticity of demand of the substitute?
When the price of a new pre-recorded DVD is £15 per DVD, 20,000 DVDs are demanded. If the price elasticity of demand is (-) 2.5, how many DVDs would be demanded if its price fell to £12 per DVD?
The price elasticity of demand for digital cameras will be influenced by
The diagram shows the demand and supply curves for a product following the introduction of an ad valorem tax. As a result of the shift in the supply curve from S1 to S2, the level of consumer surplus falls by
If the supply curve of a commodity is positively sloped, a fall in the price of the commodity caused by an inward shift of demand results in
In a typical demand schedule, quantity demanded
Given a rise in real income, the demand curve for an inferior good will, other things being equal
The diagram shows the effect of a tax on producers introduced by the Government. As a result of the tax, the total tax revenue going to the government equals area
The demand curve for lobster is downward sloping. If the demand for lobster is price inelastic a reduction in its price (other things remaining equal) must result in
In a free-market economy, an increase in the price of a good will
Which one of the following statements referring to the price mechanism is correct?
The relationship in the diagram illustrates that the two goods S and T are
The diagram shows the effect of a tax on petrol to reduce road congestion and pollution from road use. It can be deduced from the diagram that
A product has a price elasticity of supply of +1.2. If its price rises from £6.00 to £8.50 then its supply will
Which one of the following measures is designed to deal with divergences between private and social costs?
When the economy is operating on its production possibility frontier, an increase in the production of public goods will