Month: April 2019

Which of the following is an external cost of production?

Select ONE answer:

1. The cost of a public relations campaign in support of a new ‘eco-friendly’ factory
2. The cost of installing environmentally-friendly equipment in a new factory
3. The cost of traffic congestion resulting from opening a new factory
4. The cost of transporting products from a new factory to international retail outlets

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

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

1. An internal cost which concerns ‘eco-friendliness’ to an external cost.
2. A cost which applies to environmentally-friendly equipment to an external cost.
3. Correct: congestion costs as falling on a third party – the community.
4. A cost which applies to moving products outside the factory to an external cost in an economic sense.

 

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Which of the following statements is a normative statement?

Select ONE answer:

1. An increase in the indirect tax on cigarettes will increase the price of cigarettes
2. People aged under 21 years old are more likely to smoke than people over 30 years old
3. People should not be allowed to smoke in private cars
4. Smoking can damage your health

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

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

1. Positive statement – testable hypothesis.
2. Positive statement – testable hypothesis.
3. Correct: value judgement.
4. Positive statement – testable hypothesis.

 

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It has been estimated that the price elasticity of supply (PES) of flood defences is 0.25 in the short run and 1.25 in the long run. Which of the following combinations of statements is correct?

Select ONE answer:

1. Short run PES of flood defences – Elastic / Long run PES of flood defences – Elastic
2. Short run PES of flood defences – Elastic / Long run PES of flood defences – Inelastic
3. Short run PES of flood defences – Inelastic / Long run PES of flood defences – Elastic
4. Short run PES of flood defences – Inelastic / Long run PES of flood defences – Inelastic

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

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

1. In the short run price elasticity of supply is inelastic.
2. Over time price elasticity of supply becomes more elastic.
3. Correct: In the short run price elasticity of supply is inelastic and in the long run it becomes elastic.
4. In the long run price elasticity of supply is elastic.

 

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

Which of the following is the best example of a public good?

Select ONE answer:

1. Defence
2. Electricity supply
3. Health services
4. University education

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

This multiple choice question is suitable for Economics KS5 classes.

The answer is 1

1. Correct: non-excludable and non-rival.
2. Excludable and rival.
3. Rival.
4. Excludable and rival.

 

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An economy is allocatively efficient when?

Select ONE answer:

1. the marginal private benefit of consumption equals the marginal social benefit
2. the output produced maximises total consumer welfare
3. there is neither unemployment nor underemployment of factors of production
4. total consumer surplus is exactly equal to total producer surplus

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

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

1. Incorrect (ignores production).
2. Correct: This is a statement which reflects what is meant by allocative efficiency.
3. Incorrect refers to technical productive efficiency.
4. Incorrect, simply untrue.

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