1. What will necessarily cause the supply curve of labour in a particular industry to shift to the right?
A a fall in wages paid in similar occupations
B a greater use of machinery
C an increase in demand for the product
D a strengthening of trade union influence in the industry

2. A café owner near a beach employed five staff and paid them each $10 an hour. During the
holiday season two extra staff were needed. To get extra staff the employer had to increase the
hourly rate for all staff to $12 an hour.
What was the marginal cost each hour of employing two extra staff?
A $2 B $24 C $34 D $84

3. The diagram shows an economy’s production possibility curve.

What causes a movement from point X to point Y?
A a positive output gap
B a recession
C actual economic growth
D potential economic growth

4. In an economy real national output increases more rapidly than the increase in employment.
What could account for this?
A a decrease in the general price level
B an improvement in the country’s terms of trade
C an increase in labour productivity
D an increase in the size of the labour force

5. The table shows what has happened to three economic indicators between two years in a
country.
When would GDP have been the most accurate measure of the standard of living in that country?

	Population	Inflation rate	Income distribution
A	Constant	Low and stable	Equal
B	Constant	Low and unstable	Unequal
C	Rising	Low and stable	Equal
D	Rising	Low and unstable	Unequal

Answers