Economics is the study of
 [removed]A)production technology
 [removed]B)consumption decisions
 [removed]C)how society decides what, how, and for whom to produce
 [removed]D)the best way to run society

A resource is scarce if supply exceeds demand at zero price

The opportunity cost of a good is
 [removed]A)the time lost in finding it
 [removed]B)the quantity of other goods sacrificed to get another unit of that good
 [removed]C)the expenditure on the good
 [removed]D)the loss of interest in using savings

A market can accurately be described as
 [removed]A)a place to buy things
 [removed]B)a place to sell things
 [removed]C)the process by which prices adjust to reconcile the allocation of resources
 [removed]D)a place where buyers and sellers meet

A command economy decides resource allocation by government planning

In a free market __________ ___________
 [removed]A)governments intervene
 [removed]B)governments plan production
 [removed]C)governments interfere
 [removed]D)prices adjust to reconcile scarcity and desires

In the mixed economy
 [removed]A)economic problems are solved by the government and market
 [removed]B)economic decisions are made by the private sector and free market
 [removed]C)economic allocation is achieved by the invisible hand
 [removed]D)economic questions are solved by government departments

Positive economics studies objective explanations of the workings of the economy

Normative economics forms ___________ based on _____________
 [removed]A)positive statements, facts
 [removed]B)opinions, personal values
 [removed]C)positive statements, values
 [removed]D)opinions, facts

Microeconomics is concerned with
 [removed]A)the economy as a whole
 [removed]B)the electronics industry
 [removed]C)the study of individual economic behaviour
 [removed]D)the interactions within the entire economy

Macroeconomics is the study of ___________________
 [removed]A)individual building blocks in the economy
 [removed]B)the relationship between different sectors of the economy
 [removed]C)household purchase decisions
 [removed]D)the economy as a whole

An economic model is a physical representation of an economy

Data are important in economics because __________ and __________
 [removed]A)they suggest relationships for explanation, allow testing of hypotheses
 [removed]B)they can be used for tables, they can be graphed
 [removed]C)they can be used in computers, governments use them
 [removed]D)they provide interesting information, can be summarised

Time series data show information
 [removed]A)about the same point in time over different places
 [removed]B)about different points in time over the same variable
 [removed]C)about different variables over different places
 [removed]D)about different points in time over different places

Index numbers express base data in relation to some relative value

The retail price index is used to ______________
 [removed]A)construct price lists
 [removed]B)compare shop prices
 [removed]C)measure changes in the cost of living
 [removed]D)none of the above

A real value can be derived from a nominal value by
 [removed]A)adjusting for changes over time
 [removed]B)adjusting for data collection errors
 [removed]C)adjusting for population changes
 [removed]D)adjusting for changes in prices

To find the percentage change in a number, divide the absolute change by the original number and multiply by 100

If your income during one year is £10,000 and the following year it is £12,000, then it has grown by

A straight-line diagram can be drawn knowing the ______ and _________
 [removed]A)vertical axis and horizontal axis
 [removed]B)intercept and slope
 [removed]C)scale and slope
 [removed]D)intercept and scale

On a graph, a positive linear relationship
 [removed]A)moves down to the right
 [removed]B)moves up to the left
 [removed]C)moves up to the right
 [removed]D)moves down to the left

If the diagram of a line shows that lower values on the vertical scale are associated with higher values on the horizontal scale, this is an example of _____________
 [removed]A)a nonlinear relationship
 [removed]B)a positive linear relationship
 [removed]C)a scatter diagram
 [removed]D)a negative linear relationship

When we know the quantity of a product that buyers wish to purchase at each possible price, we know
 [removed]C)Excess demand
 [removed]D)Excess supply

Supply is the quantity of a good sellers wish to sell each time the market opens

The equilibrium price clears the market; it is the price at which ________ _________
 [removed]A)Everything is sold
 [removed]B)Buyers spend all their money
 [removed]C)Quantity demanded equals quantity supplied
 [removed]D)Excess demand is zero
 [removed]E)c and d

When a market is in equilibrium
 [removed]A)Quantity demanded equals quantity supplied
 [removed]B)Excess demand and excess supply are zero
 [removed]C)The market is cleared by the equilibrium price
 [removed]D)All of the above

________ and ________ do not directly affect the demand curve
 [removed]A)the price of related goods, consumer incomes
 [removed]B)consumer incomes, tastes
 [removed]C)the costs of production, bank opening hours
 [removed]D)the price of related goods, preferences

A change in price can cause a shift of a demand curve

A demand curve can shift because of changing
 [removed]B)prices of related goods
 [removed]D)all of the above

A supply curve is directly affected by
 [removed]B)input costs
 [removed]C)government regulation
 [removed]D)all of the above

An increase in price will cause a supply curve to shift to the left

If a price increase of good A increases the quantity demanded of good B, then good B is a
 [removed]A)substitute good
 [removed]B)complementary good
 [removed]D)inferior good

An increase in consumer income will increase demand for a _______ but decrease demand for a _________
 [removed]A)substitute good, inferior good
 [removed]B)normal good, inferior good
 [removed]C)inferior good, normal good
 [removed]D)normal good, complementary good

Price ceilings are imposed increase price above the free market equilibrium price
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