Topic 1

Question 1

What is scarcity

Answer 1

Lack of resources

Question 2

Examples of enterprise

Answer 2

Investment

Question 3

Examples of land

Answer 3

Rent / where raw material come from

Question 4

What causes a PPf curve to shift to the right

Answer 4

Increase in factors of production

Question 5

Cerebus parabus

Answer 5

All contributing factors being equal

Question 6

Subsidies

Answer 6

When the government help a product or business by funding it more

Question 7

Inelastic good

Answer 7

Price wont affect demand

Question 8

Price elastic

Answer 8

Price will affect demand

Question 9

Cross elasticity of demand

Answer 9

Responsivesnes of demand on one good and how it affects the price of another good

Question 10

Party season near Christmas meaning

Answer 10

Positive for substitutes, negative for complimentarys

Question 11

Examples of complimentary goods

Answer 11

Toothpaste and tooth brush, football boots and football, petrol and car

Question 12

Examples of substitute goods

Answer 12

Coffee and tea, coke and Pepsi

Question 13

What does RATNEST mean in terms of supply shift moving

Answer 13

Resource cost,alternative outsource price, tech , number of suppliers, expected future price , subsidies , taxes

Question 14

What does SEPTIC mean in terms of demand curve shifting

Answer 14

Subsidy goods , expected future price , population , taste / fashion , income , complimentary good

Question 15

How do you tell if a product is perfectly elastic on a graph

Answer 15

Straight horizontal line

Question 16

How do you tell a product is perfectly in elastic on a graph

Answer 16

A vertical straight line

Question 17

What is the promblem with merit goods

Answer 17

They are underproduced and under used

Question 18

What is the problem with demerit good

Answer 18

Over produced and over used

Question 19

What is market failure

Answer 19

Missalocation of resources

Question 20

Why is the price ceiling always below equilibrium

Answer 20

It will shift demand making price stay reasonable, use on merit goods

Question 21

True or false price floor is used on demerit goods

Answer 21

True

Question 22

What is joint demand

Answer 22

The demand for one good leads to the demand for another

Question 23

Composite demand

Answer 23

The demand for a good that has multiple purpose

Question 24

Joint supply

Answer 24

When the supply for one good automatically leads to the supply for another good

Question 25

Examples of composite demand

Answer 25

Milk used for all sorts of foods

Question 26

Examples of joint demand

Answer 26

Substitute goods

Question 27

Derived demand

Answer 27

Cafes in tourist attraction

Question 28

Examples of joint supply

Answer 28

Cow beef leather

Question 29

What is the productivity gap

Answer 29

The difference between labour productivity

Question 30

What is labour productivity

Answer 30

Output per worker

Question 31

Capital productivity

Answer 31

Output per unit of capital

Question 32

What is a firm

Answer 32

A productive organisation which sells its output of goods

Question 33

What is specialisation

Answer 33

A worker only performing one task or a narrow range of tasks

Question 34

What is division of labour

Answer 34

Different workers perform different tasks in the course of producing a good or service

Question 35

What is marginal returns of labour

Answer 35

The change in the quantity of total output resulting from the employment of one more worker, holding all the other factors of production fixed.

Question 36

Law of diminishing marginal returns

Answer 36

A short-term law which states that as a variable factor of production is added to a fixed factor of production,both the marginal and eventually the average returns to the variable factor will begin to fall

Question 37

What does total returns mean

Answer 37

The whole output produced by all the factors of production,including labour , employed by a firm

Question 38

Average returns of labour

Answer 38

Total output divided by the total number of workers employed

Question 39

What is increasing return to scale

Answer 39

When the scale of all the factors of production employed increases,output increases at a faster rate

Question 40

Constant returns to scale

Answer 40

When the scale of all the factors of production employed increases,output increases at the same rate