IGCSE Economics Paper-1: Specimen Questions with Answers 52 - 53 of 64

Question 52

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Question

MCQ▾

Quasi-public good refers to a

Choices

Choice (4)
a.A commodity or service, which is made available to all members of society.
b.Good that yields positive benefit to people
c.Owners can exercise private property rights.
d.A near-public good

Answer

d.

Explanation

  • Quasi-public good is good that has features of both public and private good especially when the consumption rivalry is at its peak. Market for these goods is considered incomplete and inefficient market.
  • Quasi-public goodsrival can be called semi-non- to an extent like extra consumers using a park; beach or road will not reduce the space available for others. Other examples of Quasi-Public goods are:
    • Roads
    • Tunnels
    • Bridge
    • Higher education

Question 53

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Question

MCQ▾

The workers union at cycle manufacturing company negotiates with management for increase in wages during period of economic prosperity. How would the new wage contract affect the supply of new cycles manufactured in the market?

Choices

Choice (4)
a.There will no change in the supply curve, as production will decrease
b.Supply curve will shift towards right
c.There will be no change in the supply curve, as production will increase
d.Supply curve will shift towards left

Answer

d.

Explanation

  • A leftward shift in the supply curve indicates that any given price the supply of the quantity of a commodity will decrease.
  • Market supply is affected by various factors like, cost of production, price, technology of production, availability of labor, wages, etc. Any change in the factors except price will cause a shift (left or right) in the supply curve.
Supply curve will shift towards left

Supply Curve Will Shift Towards Left

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  • According to the question if the wage rate of the workers is increased then supply curve will shift towards left, as the rise in wage rate will cause a rise in cost of production.
  • There is an inverse relationship between cost of production and supply of a commodity, if cost rises supply will decrease and vice versa.

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