CCEA A-Level Economics AS 1 The Market System overview quiz quiz

The next best alternative forgone when a choice is made

The total money spent on all the goods a consumer buys

The cost of producing one extra unit of a good

The difference between total revenue and total cost

Rent

Profit

Wages

Interest

Producing more than is physically possible

Allocating resources perfectly efficiently

Not using all of its resources fully

Experiencing rapid long-run economic growth

A fall in the price of the good itself

A rise in the price of the good itself

A movement to a new equilibrium after a supply change

A rise in consumer incomes for a normal good

Excess supply, that is a surplus

Excess demand, that is a shortage

A new lower equilibrium price immediately

No change because markets always clear instantly

Perfectly elastic

Unit elastic

Price inelastic

Price elastic

A luxury good

An inferior good

A complement

A public good

Complements such as cars and petrol

Unrelated goods with no connection

Both inferior goods

Substitutes such as two brands of butter

Consumers have more time to find substitute goods

Firms have time to build capacity and adjust output

Demand always becomes more inelastic over time

Indirect taxes are removed in the long run

Rationing scarce goods to those willing to pay most

Rewarding producers who expand output

Carrying information about scarcity and demand

Being fixed by the government to protect consumers

Diamonds having a higher marginal utility because they are scarce

Water having no total utility to consumers at all

The government taxing diamonds far more heavily

Diamonds being a public good and water a private good

Provided only by private firms for profit

Excludable and rival in consumption

Cheap to produce and widely available

Non-excludable and non-rival in consumption

Over-produce the good beyond the social optimum

Under-produce the good below the social optimum

Produce exactly the socially optimal quantity

Stop producing the good altogether

A surplus of the good

A shortage of the good

No effect on the market at all

An immediate rise in supply

The price mechanism allocating resources efficiently

Consumers having perfect information about goods

Firms competing to lower their costs

Unintended consequences of an intervention