Class notes
a level price mechanism economics edexcel
- Course
- Institution
Lecture notes of 3 pages for the course Unit 2 - The UK economy - performance and policies at PEARSON (it is a slide show)
[Show more]
Seller
Follow
megagameboy75
Content preview
1.2.7 Price Mechanism1 A rise in petrol prices may lead to consumers finding alternative means of transport in order to
cut down on their petrol consumption. This is due to
A petrol and cars being in joint supply.
B the PED of petrol being positive.
C the rationing function of the price mechanism.
D the positive cross elasticity of demand between petrol and car journeys.
2 Which of the following illustrates the rationing and incentive functions of the price mechanism?
Price change Rationing function Incentive function
A Rise More supplied Less Demanded
B Fall More supplied More demanded
C Rise Less Demanded More supplied
D Fall More demanded More supplied
3 Which of these is NOT an explanation of why supply increases when prices rise?
A Because in the long run, supply is price elastic
B Because of the signalling function of the price mechanism
C Because producers know that wants are infinite
D Because prices are an incentive function in the price mechanism
4 One function of the price mechanism is to
A ensure that no surpluses of a good is produced.
B reveal where best the government can intervene as they have limited resources.
C maintain price stability.
D signal changes in demand for goods and services.
5 Which of the following shows how the price mechanism helps to allocate resources efficiently?
A It ensures lower rewards are paid to factors of production when demand for their
product rises
B The invisible hand ensures a group of people acting in their own self-interest will
lead to a socially efficient outcome
C It promotes competition in the market
D It distributes resources to those in most need of them
Copyright Tutor2u www.tutor2u.net/economics
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller megagameboy75. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.29. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
66579 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now