Theme 1 Econ

Question 1

What is the annual spending of the US on its military?

Answer 1

$751bn

This figure represents the opportunity cost associated with military expenditure.

Question 2

What type of specialization does Taiwan Semiconductor Manufacturing Company focus on?

Answer 2

Chip-manufacturing

They produce 90% of the world’s most advanced chips for firms like Apple, Nvidia, and AMD.

Question 3

What is an example of the division of labor in Tesla’s gigafactories?

Answer 3

AI-powered quality control and battery cell production

These stages enhance efficiency in the production process.

Question 4

Which country is an example of a command economy?

Answer 4

North Korea in the 1980s

Command economies are characterized by centralized control over economic activities.

Question 5

Which location is an example of a free market economy?

Answer 5

Hong Kong in the 1960s

A free market economy emphasizes minimal government intervention in economic activities.

Question 6

What is an example of a mixed economy?

Answer 6

The United Kingdom

Mixed economies combine elements of both free market and command economies.

Question 7

What type of good does Greggs report higher earnings during recessions?

Answer 7

Inferior Good

Inferior goods see increased demand when consumer incomes decline.

Question 8

What type of good is represented by iPhones?

Answer 8

Normal Good

Normal goods see increased sales as consumer incomes rise.

Question 9

What is an example of a luxury good?

Answer 9

Rolex

Luxury goods are high-end products that are not necessary for basic living.

Question 10

What percentage of household food waste stems from premature disposal due to misunderstanding best before dates?

Answer 10

15-30%

This statistic highlights the impact of asymmetric information on consumer behavior.

Question 11

How much money is held in UK bank accounts that pay no interest?

Answer 11

£276bn

This reflects inertia in consumer financial behavior.

Question 12

What was a notable example of herd behavior during the DotCom Bubble?

Answer 12

Companies like Pets.com were valued at over $1bn despite having no profit

This was driven by the belief that the internet would revolutionize the economy.

Question 13

What percentage of US adults reported drinking at least one cup of coffee a day in 2021?

Answer 13

64%

This indicates habitual behavior in beverage consumption.

Question 14

What did the UK government ban on October 1, 2023?

Answer 14

Certain single-use plastics in England

This is an example of government intervention.

Question 15

What labeling system did the UK government implement to indicate food healthiness?

Answer 15

Traffic light labeling system

This is a form of information provision by the government.

Question 16

What is the minimum price on alcohol per unit in Scotland?

Answer 16

65p

This is an example of a minimum price set by government intervention.

Question 17

How many apartments in NYC have a maximum price imposed?

Answer 17

Over 1 million

This reflects government intervention in housing markets.

Question 18

How much did the UK government allocate in grants for installing energy-efficient heat pumps in 2023?

Answer 18

£450mn

This subsidy aims to reduce carbon emissions.

Question 19

How much did the UK government’s investment arm spend on business class flights?

Answer 19

£7mn

This is an example of administration costs associated with government failure.

Question 20

What percentage more likely were rent-controlled apartments to have maintenance issues?

Answer 20

8%

This is an unintended consequence of imposing maximum prices on rent.

Question 21

What is an example of a PED inelastic good?

Answer 21

Diabetes medication (ozempic, insulin)

These goods have a low price elasticity of demand, meaning quantity demanded does not significantly change with price variations.

Question 22

What is an example of a PED elastic good?

Answer 22

Designer handbags

Specifically, the price of Chanel Classic Flip bag doubled in 2019 from $5,800 to $10,200, resulting in a steep decline in demand.

Question 23

What is the cross elasticity of demand (XED) between Pepsi and Coca Cola?

Answer 23

0.64

This positive XED indicates that the two goods are substitutes.

Question 24

What is the relationship between PS5 and PS5 video games in terms of XED?

Answer 24

Directly linked

This indicates that they are complementary goods.

Question 25

What is an example of a PES elastic good?

Answer 25

Fast fashion industry ## Footnote Expected to grow from $106bn in 2022 to $185bn by 2027, showing rapid supply increase.

Question 26

What is an example of a PES inelastic good?

Answer 26

US eggs ## Footnote A dozen US eggs now cost over $8 due to avian flu destroying farm produce, shifting supply inwards.

Question 27

What is a negative production externality?

Answer 27

Treating illnesses related to computing infrastructure construction costs US public health $5.4bn ## Footnote This highlights the unaccounted costs of production on public health.

Question 28

What is a negative consumption externality?

Answer 28

Diabetes costs the NHS £6bn annually ## Footnote Often caused by the consumption of high fat and sugar foods (HFFS).

Question 29

What is a positive consumption externality?

Answer 29

Flu vaccinations prevent 3.7 million medical visits annually in the US ## Footnote This demonstrates the societal benefits of vaccination programs.

Question 30

What is a positive production externality?

Answer 30

Deployment of renewable energy technologies in 2020 helped avoid an estimated 2.1 gigatonnes of CO2 emissions ## Footnote Highlights the environmental benefits of renewable energy initiatives.