1 Transport is viewed as a derived demand. Derived demand in this context means: a) A policy to limit congestion in city centres b) An individual's ability and willingness to buy transport services c) A nation's ability and willingness to provide an adequate transport infrastructure d) The demand for transport services is determined by the demand to transport goods and passengers from one place to another
Multiple choice questions
1.1 Transport is viewed as a derived demand. Derived demand in this context means:
a) A policy to limit congestion in city centres
b) An individual's ability and willingness to buy transport services
c) A nation's ability and willingness to provide an adequate transport infrastructure
d) The demand for transport services is determined by the demand to transport goods
and passengers from one place to another
1.2 Holding everything else constant, an improvement in technology affecting the manufacture
of a particular good will . . . .
a) Shift the supply curve to the left.
b) Shift the supply curve to the right
c) Shift both the demand curve and the supply curve to the right.
d) Shift both the demand curve and the supply curve to the left.
1.3 If the demand for Product A does not change as the price of Product B increases then
a) The two goods are unrelated.
b) The two goods are substitutes.
c) The two goods are complements.
d) The consumers of Product B have enjoyed an increase in real income
1.4 Which of the following would increase the amount of an inferior good that buyers would
like to purchase?
a) An increase in buyers' incomes
b) An increase in the price of a complement
c) A decrease in the price of a substitute
d) A decrease in buyers' incomes
1.5 If buyers expect the price of a good to rise in the future, the result is:
a) A decrease in supply today
b) An increase in supply today
c) An increase in demand today
d) An increase in quantity demanded today
1.6
a) Is very small relative to the size of the entire market.
b) Is a price taker
c) Sells identical products
d) All of the above
1.7 An externality is
a) The effect of government regulation on market price and output.
b) The amount by which price exceeds marginal cost.
c) A cost or benefit arising from a decision not borne/enjoyed by the decision maker
d) Someone who consumes a good without paying for it
1.8 The price elasticity of demand measures the:
a) Responsiveness of a good's price to a change in quantity demanded
b) Adaptability of suppliers when a change in demand alters the price of a good
c) Responsiveness of quantity demanded to a change in a good's price
d) Responsiveness of quantity supplied to a change in quantity demanded
1.9 Market failure can be caused by
a) Too much completion
b) Externalities
c) Low consumer demand
d) Scarcity
1.10 Which of the following most closely resembles a public good?
a) Spinach
b) An ipod
c) An internal combustion engine
d) The sewerage system
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