Microeconomics Answers

An increase in supply... (4 marks) a) indicates that more is supplied at higher prices. b) indicates that more is supplied at lower prices. c) indicates that more is supplied at all prices. d) is illustrated by an upward shift of the supply curve.

Which of the following statements is incorrect? (4 marks) a) The three major flows in the economy are total production, total income and total spending. b) There are two sets of markets in a simple economy: goods and services markets and factor markets. 1.8 c) In the simple circular flow of economic activity, real" flows of goods and factors, and financial flows, move in opposite direction. d) Firms are buyers in the goods markets and sellers in factor markets, while households are buyers in factor markets and sellers in goods markets. 

An increase in supply... 

indicates that more is supplied at higher prices.

indicates that more is supplied at lower prices.

indicates that more is supplied at all prices.

is illustrated by an upward shift of the supply curve.

Consumer surplus indicates that... (4 marks) a) more will be demanded at lower prices than at a higher prices. b) it is impossible to increase consumer well-being by changing the way in which income is spent. c) consumers often get more value from a good than is represented by the price they pay for that good. d) the allocation of resources is decided by the interaction of buyers and sellers.

There is an increase in the number of adverts highlighting the danger of consuming sugar. Which

of the following is likely to occur in the market for sugarless sweets, as a result of this?

a) An increase in both the equilibrium price and quantity traded.

b) A decrease in equilibrium price and an increase in equilibrium quantity traded.

c) A decrease in both the equilibrium price and quantity traded.

d) An increase in the equilibrium price and a decrease in the equilibrium quantity traded.

An increase in supply... 

a) indicates that more is supplied at higher prices.

b) indicates that more is supplied at lower prices.

c) indicates that more is supplied at all prices.

d) is illustrated by an upward shift of the supply curve.

In using the tanks and trucks in a production possibilities curve with increasing opportunity cost producing more and more tanks

Consumer surplus indicates that...

a) more will be demanded at lower prices than at a higher prices.

b) it is impossible to increase consumer well-being by changing the way in which income is spent.

c) consumers often get more value from a good than is represented by the price they pay for that good. d) the allocation of resources is decided by the interaction of buyers and sellers. 

Consumer surplus indicates that

Consumer surplus indicates that... (4 marks) a) more will be demanded at lower prices than at a higher prices. b) it is impossible to increase consumer well-being by changing the way in which income is spent. c) consumers often get more value from a good than is represented by the price they pay for that good. d) the allocation of resources is decided by the interaction of buyers and sellers.