wh soneenkdscarcity of the following BEST defines the Goode and services to consumers are 4 short supply. (B) There are not enough resources available at present. (C) © Theexcessof human wants over the economy's resources, (D) The wants of society are greater than the supply of goods A baker can bake any combination of items, using the following options below. [ “Loaves |< | of bread | 36 ‘What isthe opportunity cost of producing one cake? (A) Lloafof bread (B) — Stoaves of bread (C)— Tloavesofbread (D) B loaves of bread Which of the following statements BEST ‘production possibility frontier"? (A) The limit of the combinations of goods and services that can be produced (8) The combinations of goods and services that may be produced in a country (C) The mixture of goods and services iat are desired by a country (P) An illustration of an economy producing goods and serviees for its citizens Item 4 refers to the following diagiams _Hthssteastfonrsypes of production passibility Montes + ® Capital \ goods |S (A e__ é poods (ls zoos K Capital Pom fo Roods \ - Consumer goods R Capital (o) boots oe goods Which diagram illustrates decreasing opportunity costs? (A) A @) OB a ¢ (D) DdWhich of the following diay ams ilustrates a perfectly elastic dentand curve? Biss mt w | Price w ~ Om” — Price! o 6. A variable whose value is determined independently of the model may be classified as (A) exogenous (B) endogenous (©) relational (0) functional GO ONTOTHE NEXT PAGE 021 16010/CAPE20074. Hens 7-8 refer to the following diagrams ehese-adeis the consumer's initial buelget line getline. Good 5| Lem 9 refers to the diagram heiow Oa vantiy | 9, The diagram above BEST describes the relationship between income and quantity demanded of What has happened to cause the budget line (A) anonnal good ta shift from @@ toed? (B)—agiffen good (©) aninferior good (A) Consumer income decreased and {D) ostentatious goods prices remiained unchanged (B) The price of good x fell, ceteris paribus, 10, The following isa caption from Tropic Island (C) ‘The price of good x rose and the pri daily newspaper of good y Fell (p) prices of good.xand yfell inthe = . -) same proportion [ease PRICES PLUMMET AS BIRD PLU | THREATENS THE ISLAND | IC, is downward sloping and convex to the L _s origin. Theshape is convex because the (A) consumer opportunity cost is increasing, (B) marginal rate of substitution is increasing (C)_— marginal rate of substitution is decreasing. (DP) consumer opportunity cost is decreasing, Which of the following could have led to the fallin chicken prices? (A) Increasing demand for chicken (B) Decreasing demand for chicken (C) Increasing supply of chicken (D) Decreasing supply of chicken