QUESTION 10 The basic difference between consumer goods and

QUESTION 10 The basic difference between consumer goods and capital goods is that oA consumer goods satisfy wants directly (now) while capital goods satisfy wants indirectly (ater) O B the production of capital goods is not subject to the law of increasing costs C an economy that commits a relatively large proportion of its resources to capital goods must accept a lower growth rate o D consumer goods are produced in the private sector and investment goods are produced in the public sector QUESTION 11 Competition means that o A there is more than one seller in a market o B a given product can be purchased at a number of diferent prices C there are large numbers of independently-acting buyers and sellers in each market O D sellers can cause artificial product scarcities and thereby manipulate market price QUESTION 12 If consumers are willing to pay a higher price than previously for each level of output, we can say that there has occurred O A an increase in supply OB a decrease in supply O C an increase in demand o D. a decrease in demand QUESTION 13 Na product is in surplus oupply, we can conclude that its price: A ?s in equilibrium D B will tise in the near future OD C is above the equilibrium level O D is below the equilibrium level QUESTION 14 A market is in equilibrium 0 A whenever the demand curve is downsloping and the supply curve is upsloping O the amount which producers want to sell is equal to the amount which consumers want to buy C at all prices above that shown by the intersection of the supply and demand curves D provided there is no surplus of the product

Solution

Question 10. A. consumer goods satisfy wants directly (now) while capital goods satisfy wants indirectly (later).
(Consumer goods are final goods which are purchased for final consumption and they do not have any further productive use whereas capital goods are intermediate goods which are used for creating final goods.)

Question 11. C. there are large numbers of independently-acting buyers and sellers in each market.
(Competition means that there exists large number of buyers and sellers so that there is neither monopoly nor monopsony.)

Question 12: C. an increase in demand
(When demand incresaes and supply remains unchanged then consumers are willing to pay higher prices.)

Question 13: C. is above the equilibrium level.
(When supply of a product exceeds the demand of the product it means price level is above the equilibrium price as at a higher price producers will be willing to supply more but buyers demand less. )

Question 14: B. if the amount which producers want to sell is equal to the amount which consumers want to buy.
(Equilibrium is determined at the point where supply equals demand so that amount which consumers are willing to buy equals the amount producers are willing to sell.)