Q.1.1 What is the cause of scarcity in the economy? (a) Limited wants and unlimited resources. (b) Limited wants and limited resources. (c) Unlimited wants and unlimited resources. (d) Unlimited wants and limited resources. Q.1.2 Which one of the following is a microeconomic issue? (a) The rate of economic growth in South Africa. (b) The price of maize in South Africa. (c) The unemployment rate in Zimbabwe. (d) The South African inflation rate. Q.1.3
Q.1.1
What is the cause of scarcity in the economy?
(a)
Limited wants and unlimited resources.
(b)
Limited wants and limited resources.
(c)
Unlimited wants and unlimited resources.
(d)
Unlimited wants and limited resources.
Q.1.2
Which one of the following is a
(a)
The rate of
(b)
The price of maize in South Africa.
(c)
The
(d)
The South African inflation rate.
Q.1.3
What are the three major economic flows?
(a)
Income, spending and saving.
(b)
Spending, production and saving.
(c)
Income, saving and investment.
(d)
Income, spending and production.
Q.1.4
Which one of the following is a condition for a market to exist?
(a)
A potential buyer and a potential seller.
(b)
A buyer must have the means to purchase.
(c)
The agreement must be guaranteed by law or by tradition.
(d)
All of the above are correct.
Q.1.5
How can the impact of a decrease in the price of petrol on the demand curve for petrol be illustrated?
(a)
The demand curve for petrol will shift to the left.
(b)
The demand curve for petrol will shift to the right.
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(c)
The downward movement along the demand curve for petrol.
(d)
The demand curve will become more elastic.
Q.1.6
When an individual’s income rises, ceteris paribus, his/her demand for a loaf of bread, a normal good:
(a)
Rises.
(b)
Falls.
(c)
Remains unchanged.
(d)
Becomes more positive.
Q.1.7
If there is a strike in the milk production industry, then, ceteris paribus;
(a)
the demand for milk will increase.
(b)
the demand for milk will decrease.
(c)
the supply of milk will decrease.
(d)
the supply of milk will increase.
Q.1.8
An increase in demand:
(a)
indicates that more is demanded at higher prices.
(b)
indicates that more is demanded at lower prices.
(c)
is illustrated by a rightward shift of the demand curve.
(d)
is illustrated by a leftward shift of the demand curve.
Q.1.9
An increase in the cost of flour used to bake bread is most likely to;
(a)
decrease the demand for bread.
(b)
increase the supply of bread.
(c)
decrease the supply of bread.
(d)
increase the demand for bread.
Q.1.10
Which of the following will result in a decrease in the
(2)
(a)
An increase in both demand and supply.
(b)
A decrease in both demand and supply.
(c)
An increase in demand together with a decrease in supply.
(d)
A decrease in demand together with an increase in supply.
Q.1.11
When the price of commodity C rises by 10%, the quantity demanded falls by 18%. This is an example of:
(a)
perfectly elastic demand.
(b)
elastic demand.
(c)
unitary
(d)
inelastic demand.
Q.1.12
If the income elasticity of demand for a good is +0,5, then this implies that this good must be a(n)
(2)
(a)
necessity.
(b)
luxury.
(c)
inferior good.
(d)
Complement.
Q.1.13
If the cross elasticity of demand for two goods, A and B, is -5,0, then this implies that these goods must be
(a)
substitutes.
(b)
necessities.
(c)
luxuries.
(d)
complements.
Q.1.14
Utility from consuming a good is understood by economists to mean;
(a)
how often we consume the good.
(b)
how much satisfaction or benefit we get from consuming the good.
(c)
how much it costs to buy the good.
(d)
how we best use the good.
Q.1.15
The
(2)
(a)
supply slopes upwards.
(b)
consumers are constrained by income.
(c)
of the law of diminishing marginal utility.
(d)
prices move with demand.
Q.1.16
The vertical distance between the
(a)
increases as output increases.
(b)
decreases as output increases.
(c)
is equal to the total variable cost per unit of labour.
(d)
is equal to the total variable cost.
Q.1.17
Marginal cost is defined by:
(a)
total cost increases when one more unit is produced.
(b)
fixed cost increases when one more unit is produced.
(c)
Total revenue increases when one more unit is produced.
(d)
average cost increases when one more unit is produced.
Q.1.18
Which of the following statements about a monopoly is true?
(a)
The monopolist has a flat demand curve because of high barriers to entry.
(b)
For a monopolistic firm, profit will be maximised where price = marginal revenue.
(c)
In the long run, a monopolist can earn only normal profits.
(d)
Price, in the long run, is not usually equal to the minimum average total cost.
Q.1.19
Which of the following will NOT shift the market supply of labour curve?
(a)
A change in the wages of the labourers.
(b)
A change in migration.
(c)
A change in the size of the population due to a change in birth or death rates.
(d)
Trade union action.
Q.1.20
An upward-sloping labour supply curve illustrates that ceteris paribus;
(2)
(a)
the quantity of labour supplied and the hours of work per week are directly related.
(b)
the quantity of labour supplied and the price of labour used to produce output are inversely related.
(c)
individuals use higher income to buy back leisure time.
(d)
a greater quantity of labour would be supplied at higher wage rates.
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