WHALES AS Economics: Quiz 1

A worker can make 10 hats or 5 pairs of shoes in a day. In the market, three hats can be sold at the same price as two pairs of shoes. The worker should make

A hats only.

B shoes only.

C 4 hats and 3 pairs of shoes daily.

D 6 hats and 2 pairs of shoes daily.

Which characteristic of money is most essential if it is to serve effectively as a store of value?

A divisibility

B liquidity

C portability

D scarcity

The Indian government operates a pension scheme. Which statement about this scheme would be classed as normative?

A To be eligible, individuals must be above the age of 60 and live below the poverty line.

B In January 2020, eligible individuals aged over 70 received 500 rupees per month.

C In 2018, the Supreme Court said the government must review pension payments because they are unrealistic.

D In January 2020, the Indian government announced that it might increase the payment to 1000 rupees per month.

What is not a function of money?

A It is a medium of exchange.

B It is a store of value.

C It is a unit of account.

D It is a measure of satisfaction.

The producer of a good with a price-elastic demand observes that a rise in its price is accompanied by a rise in total revenue. What might explain this?

A The good is an inferior good.

B The rise in price was due to an increase in demand for the good.

C The supply of the good was inadequate to meet the demand.

D The supply of the good was price-inelastic.

Why does an individual’s demand curve generally slope downwards to the right?

A The additional satisfaction an individual gets from consuming most goods decreases as consumption increases.

B The additional satisfaction an individual gets from consumption decreases as income rises.

C The individual has finite income which is used to attempt to satisfy many wants.

D For most goods the price charged by producers falls as the quantity purchased increases.

When will the price mechanism not function as a system for allocating goods?

A when the government bans advertising

B when the government maintains an effective maximum price

C when there is a limited supply of the good

D when there is a powerful company able to set the market price

The diagram shows a production possibility curve for an economy that is producing at point P. Which quantity of X is given up to produce the quantity of Y shown?

A 40

B 50

C 100

D 110

What is a normative economic action based on?

A fact

B market forces

C opinion

D price changes

A production possibility curve shows the combinations of outputs an economy can produce using all available resources. At which points on the diagram are all available resources used?

A W and X only

B W, X and Z only

C W, X, Y and Z

D Z and Y only