A function that indicates the maximum output per unit of time that a firm can produce, for every combination of inputs with a given technology, is called:
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An isoquant
A production possibility curve
A production function
An isocost function


What happens in the market for airline travel when the price of traveling by rail decreases?
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The demand curve shifts left.
The demand curve shifts right.
The supply curve shifts left.
The supply curve shifts right.


If a sales tax on beer leads to reduced tax revenue, this means:
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Elasticity of demand is < 1.
Elasticity of demand is > 1.
DeMand is upward-sloping.
Demand is perfectly inelastic.


When the price of petrol rises 10%, the quantity of petrol purchased falls by 8%. The demand for petrol is:
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Perfectly elastic
Unit elastic
Elastic
Inelastic


A Demand Curve is price inelastic when:
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Changes in demand are proportionately smaller than those in price
Changes in demand are proportionately greater than those in price
Changes in demand are equal than those in price
None of the given options.


The effect of a change in the price of a good or service on the quantities consumed when the consumer remains indifferent between the original and new combination of goods consumed is the:
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Substitution effect
Real income effect
Income effect
Price effect

If the cost of computer components falls, then
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The demand curve for computers shifts to the right.
The demand curve for computers shifts to the left.
The supply curve for computers shifts to the right
The supply curve for computers shifts to the left


The short run, as economists use the phrase, is characterised by:
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All inputs being variable.
At least one fixed factor of production and firms neither leaving nor entering the industry.
No variable inputs - that is, all of the factors of production are fixed.
A period where the law of diminishing returns does not hold.


When an industry's raw material costs increase, other things remaining the same:
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The supply curve shifts to the left.
The supply curve shifts to the right.
Output increases regardless of the market price and the supply curve shifts upward.

Output decreases and the market price also decrease.
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The law of diminishing returns assumes:
There are no fixed factors of production.
There are no variable factors of production.
Utility is maximised when marginal product falls.
Some factors of production are fixed.


Price floor results in:
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Equilibrium
Excess demand
Excess supply
All of the given options

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If a decrease in price increases total revenue:
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Demand is elastic
Demand is inelastic
Supply is elastic
Supply is inelastic


If the income elasticity of demand is 1/2, the good is:
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A luxury.
A normal good (but not a luxury).
An inferior good.
A Giffen good.


Other things equal, expected income can be used as a direct measure of well-being:
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No matter what a person's preference to risk.
If and only if individuals are not risk-loving.
If and only if individuals are risk averse.
If and only if individuals are risk neutral.


When drawing demand and supply curves, economists are assuming that the primary influence on production and purchasing decisions is:
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Price
Cost of production
The overall state of the economy
Consumer incomes


It measures the percentage change in demand given a percentage change in consumer's income.
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Price elasticity of demand
Income elasticity of demand
Supply price elasticity
Cross price elasticity