17. In the circular flow of economic activity, the primary economic activities o

Question

17. In the circular flow of economic activity, the primary economic activities of businesses are output and r b. Buying output and selling resources c. Collecting taxes and selling output d. Employing resources and producing output 18. A country that removes trade barriers so as to allow free International trade will find that a. b. Its production possibilities frontier It can now consume more than it can produce c. Its unemployment rate will Increase by the percentage dfference between its Imports and d. shifts outward exports Its standard of living falls or rises to equal that of its trading partners 19. The demand for a product at a given time is defined as the a. b. c. d. Desire for it Sum spent on it Measure of total utility for it Amount that would be bought at various prices 20. The law of demand states that as a. b. c. d. Price decreases, demand increases Price increases, quantity demanded increases Price decreases, quantity supplied increases Price decreases, quantity demanded increases 21. An increase in demand means that a. b. c. d. More will be bought at a lower price More will be bought at the same given prices More will be purchased at a higher price The quantity demanded increases as price increases 22. Which of the following is not a determinant of demand? a. Production costs b, consumer expectations Prices of related goods d. c. Tastes and preferences of consumers 23. A supply curve generally a. Is a straight horizontal line b. Is a straight vertical line c Slopes downward to the right d. Slopes upward to the right 24. The point where quantity demanded and quantity supplied are equal is known as th a. Ceiling price b. Minimum price c. Equilibrium price d. Administered price

Explanation / Answer

17. d) Employing resources and producing output

(The primary activity of the businesses is to produce the output with the help of available resources)

18. b) It can now consume more than it can produce

(as the trade barriers are removed goods can be imported hence consumption increases more than production)

19. d) amount that would be brought at various prices

(demand is seen in relation to the prices)

20. d) as price decreases, quantity demanded increases.

(Law of demand states the inverse relationship between the price and quantity demanded)

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