Month: August 2018

The decrease in consumer surplus and producer surplus that results from an inefficient level of production is called the ….

Select ONE answer:

1. external benefits
2. big tradeoff
3. external cost
4. deadweight loss

Explain how the price mechanism works in the context of mass markets:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is a multiple choice question is suitable for Economics KS5 classes.

The answer is 4

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________ can prevent the efficient allocation of resources.

Select ONE answer:

1. Competitive markets 
2. Marginal cost
3. The equilibrium price
4. Price floors

Explain how firms respond to a change in demand:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is a multiple choice question is suitable for Economics KS5 classes.

The answer is 4

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Resource use is efficient when production is such that marginal social benefit is …….

Select ONE answer:

1. equal to the marginal social cost
2. greater than the marginal social cost
3. at its maximum value
4. less than the marginal social cost

Explain the functions of the price mechanism to allocate resources: rationing, incentives, signaling:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is a multiple choice question is suitable for Economics KS5 classes.

The answer is 1

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John has just completed an original oil painting. After considering the production costs for brushes, paint, canvas, and the value of John’s labor time, the opportunity cost of the painting is £1,000. Luckily for John, one art lover paid him £1,500.  How much producer surplus did John obtain?

Select ONE answer:

1. The amount of producer surplus cannot be determined from the information given.
2. £500
3. £1,500
4. £1,000

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is a multiple choice question is suitable for Economics KS5 classes.

The answer is 2

This work is licensed under a Creative Commons Attribution 4.0 International License.

John receives consumer surplus on the new computer he buys if …….

Select ONE answer:

1. the price of the computer is marked down by 25 percent.
2. the price of the computer is less than the marginal benefit he receives from buying the computer.
3. the price of the computer is equal to his willingness to pay for the computer.
4. he pays for the computer with money he earned from the stock market.

Explain the limitations of the supply and demand model and its predictions:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is a multiple choice question is suitable for Economics KS5 classes.

The answer is 2

This work is licensed under a Creative Commons Attribution 4.0 International License.