SACE Stage 2 Economics Practice Questions - SACE Stage 2 Economics External Assessment Exam - SACE Stage 2 Economics Practice Questions - SACE Stage 2 Economics External Assessment Exam

Question 1

Which of the following scenarios will cause a rightward shift of the market demand curve for coffee, rather than a movement along the demand curve?

A decrease in the market price of coffee beans. An increase in consumer disposable income, assuming coffee is a normal good. An increase in the cost of labor used in coffee shops. An improvement in coffee harvesting technology.

Correct Answer:

An increase in consumer disposable income, assuming coffee is a normal good.

Question 2

If the price of a solar panel system decreases by 10% and the quantity demanded increases by 25%, what is the Price Elasticity of Demand (PED) and how is demand classified?

PED = -0.4; demand is inelastic. PED = -2.5; demand is elastic. PED = -1.5; demand is unit elastic. PED = -25.0; demand is perfectly elastic.

Correct Answer:

PED = -2.5; demand is elastic.

Question 3

A boutique bakery increases the price of its artisanal sourdough bread by 15%, resulting in a 5% decrease in total sales revenue. What does this reveal about the price elasticity of demand for this bread?

Demand is price inelastic, as price and total revenue move in the same direction. Demand is price elastic, because the percentage drop in quantity demanded exceeded the percentage increase in price. Demand is perfectly inelastic, as revenue changed independently of quantity. Demand is unit elastic, because revenue and price changed proportionally.

Correct Answer:

Demand is price elastic, because the percentage drop in quantity demanded exceeded the percentage increase in price.

Question 4

An economic study finds that when average household income rises by 8%, the demand for instant noodles drops by 12%. What is the Income Elasticity of Demand (YED) and what type of good is instant noodles?

YED = +1.5; instant noodles are a luxury good. YED = -1.5; instant noodles are an inferior good. YED = +0.67; instant noodles are a necessity good. YED = -0.67; instant noodles are a complement good.

Correct Answer:

YED = -1.5; instant noodles are an inferior good.

Question 5

When the price of lithium-ion batteries decreases by 20%, the quantity demanded for electric vehicles increases by 30%. What is the Cross-Price Elasticity of Demand (XED) and what is the economic relationship between these goods?

XED = -1.5; electric vehicles and lithium-ion batteries are complementary goods. XED = +1.5; electric vehicles and lithium-ion batteries are substitute goods. XED = -0.67; electric vehicles and lithium-ion batteries are independent goods. XED = +0.67; electric vehicles and lithium-ion batteries are inferior goods.

Correct Answer:

XED = -1.5; electric vehicles and lithium-ion batteries are complementary goods.

Question 1

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Prepare with the SACE Stage 2 Economics Practice Questions - SACE Stage 2 Economics External Assessment Exam practice quiz. This question bank includes 100 questions covering price, market, government, demand, and billion. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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SACE Stage 2 Economics Practice Questions - SACE Stage 2 Economics External Assessment Exam

This practice set contains 100 questions from the matching question bank and focuses on price, market, government, demand, and billion. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

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SACE Stage 2 Economics Practice Questions - SACE Stage 2 Economics External Assessment Exam

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