click below
click below
Normal Size Small Size show me how
Economics U1 MC
Economics U1 Multiple choice.
Question | Answer |
---|---|
The main economic objective of firms in a market economy is most likely to be the | maximisation of profits. |
Which one of the following is most likely to lead to greater labour productivity in an industry? | An increase in capital investment in the industry |
The existence of scarcity in an economy implies that | individuals must make choices. |
An increase in UK incomes leads to an increase in demand for holidays abroad and a decrease in demand for holidays in the UK. It can therefore be concluded that | holidays in the UK are an inferior good while holidays abroad are a normal good |
Which one of the following best describes the relationship between the demand for air travel and the demand for airline pilots? | Derived demand |
When money is used as a medium of exchange | trade is likely to increase |
A firm increases the size of its business. As a result, its average costs fall because of better utilisation of its factory and the lower cost of buying advertising space. The firm therefore experiences greater | technical and marketing economies of scale. |
Which one of the following statements about market failure is correct? | The social benefits of some private goods exceed the private benefits. |
A misallocation of resources is most likely to occur in monopoly if | higher prices are charged than under competitive conditions. |
A product has a price elasticity of demand of –0.5. If the price of this product increases by 10%, then total revenue will | rise by less than 10%. |
An inferior good always has | negative income elasticity of demand |
Which one of the following is most likely to be an example of the immobility of a factor of production? Workers’ unwillingness to | change jobs. |
Market failure arises when | no account is taken of positive externalities in consumption |
A government wishing to reduce firms’ carbon emissions through the use of pollution permits may fail to achieve such a reduction because | permits issued to firms do not impose strict enough limits on their carbon emissions. |