Category: Economics

The table shows the price elasticity of demand for four goods and services:

• motor cycles 1.6
• telephone calls 1.0
• football tickets 0.3
• light bulbs 0.0

If the price of each item increased by 1%, for which of these items would the total expenditure increase?

Select ONE answer:

1. football tickets only
2. motor cycles only
3. football tickets and light bulbs
4. motor cycles and telephone calls

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

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

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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

What is the outcome for consumers and workers as a result of increased division of labour?

Select ONE answer:

1. Consumers – less choice of goods / Workers – wider range of skills
2. Consumers – fewer mass-produced goods / Workers – wider variety of tasks
3. Consumers – lower prices of goods / Workers – increased productivity
4. Consumers – lower quality of goods / Workers – increased independence

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

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

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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

What is meant by the ceteris paribus assumption?

Select ONE answer:

1. an assumption that is not supported by the facts
2. an assumption that consumers act rationally
3. an assumption that two factors are in equilibrium
4. an assumption that other factors are held constant

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

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

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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

The steel required for the construction of a new car-assembly plant in a fully employed economy, is obtained by increasing the output of the domestic steel industry.

What is the opportunity cost of producing the steel?

Select ONE answer:

1. the alternative benefits forgone by diverting additional resources to steel manufacture
2. the alternative benefits forgone by increasing the capacity of the car industry
3. the alternative benefits that would have been obtained by putting the steel to other uses
4. zero, since there is no reduction in the steel supplied to other steel users

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

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

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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

A government reduced the tax on company profits from 28% to 20%.

Which statement best describes this policy?

Select ONE answer:

1. It is both a contractionary fiscal policy and a supply-side policy.
2. It is both an expansionary fiscal policy and a supply-side policy.
3. It is both an expansionary fiscal policy and an expansionary monetary policy.
4. It is both an expansionary monetary policy and a supply-side policy.

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

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

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

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