MCQ Questions:

1. Drought in African countries often results in poor harvests. Other countries then help by sending quantities of food. What are the likely results of these events for the price of food in the drought-affected countries?
A) It will fall and then rise
B) It will rise and continue to rise
C) It will rise and remain at this higher level
D) It will rise and then fall

2. What is not held constant in constructing a demand schedule?
A) The incomes of consumers
B) The prices of complementary goods
C) The price of the good itself
D) The tastes of consumers

3. Many countries buy oil from Saudi Arabia which change is most likely to lead to a fall in the price of a barrel of oil?
A) An increase in the demand of 10% with no change in supply
B) With an increase in demand of 10%
C) No change in demand with a 10% decrease in supply
D) No change in demand with a 10% increase in supply

4. In 2011, a company selling milk in glass bottles replaced them with new plastic bottles. When they were introduced, the equilibrium quantity on the market fell. What could be a reason for this fall?
A) Consumers preferred the new bottle because it was lighter to carry
B) Milk from the farms used to fill the bottle cost more
C) The bottle was cheaper than the existing glass bottle to produce
D) The new bottle was introduced with a successful advertising campaign

5. Which will encourage domestic producers to grow more maize?
A) Granting subsidies to maize producers
B) Increasing the sales tax on maize
C) Prices for maize
D) Removing quotas on imported maize

6. A supply curve shows the link between the quantity supplied and
A) Demand
B) Equilibrium output
C) The price of the product
D) The scale of production

7. In 2011 the US Government declared that the country must increase the manufacture of fuel from crops such as corn that have previously only been used for food. What is likely to happen in the market for corn?
A) A movement along the demand curve for corn
B) A movement along the supply curve for corn
C) A shift to the left in the demand curve for corn
D) A shift to the left in the supply curve for corn

8. What is meant by the equilibrium quantity in the market for a product?
A) The average quantity produced over the year
B) The average quantity sold over the year
C) The quantity at which profit occurs
D) The quantity at which the demand and supply curves intersect

9. What is meant by an equilibrium price?
A) A government price that ensures fairness for all
B) A price that has no pressure to rise or fall
C) A price that maximizes the profits of the producers
D) A price that maximizes the satisfaction of the consumers

10. A government taxes the production of cars. What is likely to decrease?
A) The cost of supplying cars
B) The price of cars
C) The revenue for the government
D) The supply of cars at every price

11. The market for a good was in equilibrium. A change occurred which resulted in a new equilibrium with a higher price for the good and a lower quantity traded. What change would have caused this?
A) The demand curve moved to the left
B) The demand curve moved to the right
C) The supply curve moved to the left
D) The supply curve moved to the right

12. A demand curve shows the relationship between the quantity demanded and
A) A change in income
B) Consumer tastes
C) The supply of the product
D) The price of the product

13. A government subsidizes the production of pineapples. This is likely to
A) Increase the price of pineapples
B) Raise the costs of supplying pineapples
C) Raise revenue for the government
D) Cause the supply of pineapples to increase at every price

14. In 2015, there was a significant fall in the world price of petrol (gasoline). What would not have been a cause of the price fall?
A) The continuing global recovery from the world economic recession
B) The increasing exploitation of US oil reserves
C) The re-entry of Iranian producers to the world oil market
D) The shorter journeys from using the new Suez Canal

15. Petrol (fuel) retailers in a country have noticed a sharp increase in sales in August when many people take their holidays. Why might this take place?
A) Consumers’ demand curve for petrol shifts to the left in August
B) Consumers’ demand curve for petrol shifts to the right in August
C) Oil refineries increase their output in August
D) Travel companies increase their hotel prices in August

Answers:

1. D
2. C
3. D
4. B
5. A
6. C
7. B
8. D
9. B
10. D
11. C
12. D
13. D
14. A
15. B