Explanation​:
Statement I: In the short run, one or more factors of production are fixed. The long run is defined as the amount of time that needs to pass in order for all factors of production to be changeable.

Statement II: The marginal product curve intercepts the average product curve (AP) at the highest point of AP.

Statement III: Marginal Cost = ΔTC/Δq​

Explanation​:
Demand for cigarettes is likely to be inelastic because of their addictive and habit-forming nature, so most of the tax burden will likely be shifted to consumers in the form of higher prices.

Choices A, B and C are all possible outcomes of high indirect taxes on cigarettes.

Explanation​:
Bounded rationality, in the context of behavioral economics, refers to the idea that human decision-making is limited by cognitive constraints, such as information overload, time limitations, and cognitive biases.

It suggests that individuals do not always make fully rational decisions as assumed by classical economic theory, but instead make choices that are satisfactory or "good enough" given the constraints they face.

Choices A and D are also examples of the limitations of the theory of rational consumer choice, but they are not relevant in this scenario.

Choice B is an assumption supporting the theory of rational consumer choice.

Key ideas​:

• A decrease in demand refers to a leftward shift of the demand curve.
• Only non-price determinants of demand can shift the demand curve.

Explanation​:
B is correct, as petrol and cars are complementary goods. If the price of petrol goes up, fewer people will want to buy cars (used or otherwise).

Choice A is incorrect because a rise in the price of used cars would cause a decrease of quantity demanded—a movement along the demand curve—not a shift of the demand curve.

Choices C and D are both incorrect as public transit and new cars are substitutes for used cars. Therefore, a growing distaste for public transit and a rise in price for new cars should both increase demand for used cars.

Explanation​:

Choice I is incorrect: the number of substitutes for oil relates to PED, not PES

Choice II is correct: the time needed to adjust oil production inputs means that oil production does not respond to changes in price, thus making oil’s PES more inelastic

Choice III is incorrect: the cost of production is not a factor affecting PES

Choice IV is incorrect: a product being a necessity relates to PED, not PES

Explanation​:
A vertical supply curve indicates that supply is perfectly inelastic, meaning quantity supplied is fixed, and supply does not respond at all to changes in price. In this case, PES = 0. The number of tickets at a sporting event will likely be fixed as the stadium will have a fixed number of seats and a maximum capacity.

Choices A and B represent products that are likely to have relatively price-elastic supply as they can be stored.

Choice D represents a product that is likely to have relatively price-inelastic supply due to the time it takes to extract, refine and process oil.

A

Explanation​:
If quantity demanded changes by a greater percentage than an increase of income, it signifies that a good is a luxury good to that consumer.

On the Engel curve above, this relationship occurs when the slope of the curve is greater than 45$°$, so Choice A is an income elastic, or luxury, good.

Points B, C, and D are not luxury goods because they have slopes less than 45°.

A

Explanation​:
Plug the known variables into the PED formula and solve for the percentage change of quantity demanded.

−1.9 = %ΔQd/−5%​

Quantity demanded increases by 9.75$\%$ when the price decreases by 5%, so eliminate choices B and D.

When prices are lowered and PED is elastic—the value is greater than 1—the total revenue will increase, so eliminate choice C. This leaves choice A as the correct answer.

Explanation​:
D is not a correct statement as it is not enough for a consumer to desire a particular good, they must also be able to purchase it in order for them to $\text{‘}$demand$\text{’}$ it.

The following statements are correct: The market demand curve is created by horizontally adding the points of all individual demand curves (Choice A).

Price is the y-axis, so anything that impacts quantity demanded besides price will cause a shift of the demand curve (Choice B).

Future price expectations are a non-price determinant of demand (Choice C).

Explanation​:
If bread prices are expected to rise, firms will hoard grain in anticipation, reducing supply.

Choice A is incorrect, as a change in demand for rice has no impact on the supply of bread.

Choices B and D are incorrect, as improvements in technology and favourable weather would both increase supply and cause the supply curve to shift to the right.

Key idea​:

• Non-price determinants of demand shift the demand curve.

Explanation​:

A rise in the price of orange juice would decrease the quantity demanded of orange juice. As the overall demand for juice does not change, this causes an increase in demand for apple juice, as apple juice and orange juice are substitutes.

Choice A is wrong because apples are an input in the production of apple juice, so a rise in the price of apples would shift the supply curve, not the demand curve.

Choices C and D are wrong because both a fall in incomes and the emergence of new, more popular, alternatives would shift the demand curve for apple juice leftward.

Explanation​:
Corporate social responsibility (CSR) refers to a company's commitment to conducting its business in a manner that supports society's values. For example, a firm may consider the impact of its operations on various stakeholders (employees, customers, communities) or the environment.

CSR involves integrating social and environmental concerns into the company's decision-making processes and pursuing initiatives that contribute to sustainable development. In the example above, the company integrates a social concern into its decision-making processes.

Choices A, C, and D are other examples of alternative business objectives but they are not relevant in this scenario.

Explanation​:
In the 2 sector circular flow of income model, firms pay income to households because households own the factors of production.

Options A, B, and C are incorrect

• Option A: injections are not shown in the 2 sector circular flow.
• Option B money does not flow equally to all household because some factors of production are more highly valued than others.
• Option C: money flows from firms to households in the form of income for the factor services hired and from households to firms in the form of expenditures on the purchase of goods.

Explanation​:
Profit maximising conditions are:
(i) MR = MC
(ii) MC should rise after the point of equilibrium

Options A, B, and D are incorrect

• Option A: as the second condition is not met.
• Options B and D: as neither condition is met

Explanation​:

Canned corn and corn-based ethanol are in competitive supply. If demand for corn-based ethanol increases, more corn will be allocated toward producing that instead of canned corn, causing the supply of canned corn to fall. Also, falling incomes will cause demand for canned corn to fall.

Explanation​:
Availability bias refers to information which is recently available. People rely heavily on recent information and thus don't act rationally.

Options A, B, and D are other ideas related to behavioural economics.

• Option A: anchoring means making decisions on the first piece of information that people come across.
• Option B: framing deals with the way choices are presented to the consumers.
• Option C: a rule of thumb means making decisions based on experience.

Explanation​:
Bounded self-control is the idea that individuals, even when they know what they want, may not be able to act in their own interests. Other examples of bounded self-control include evidence of procrastination, and submitting to temptation.

Although choices A, C, and D are examples of the limitations of the assumptions of rational consumer choice, they are not relevant to the phenomenon of impulse buying.

Option A: any amount of profit allows management to distribute dividends, so it need not profit maximise.
Options B and C: pursuing growth or CSR goals can keep a firm from being profitable, especially in the short run.

Explanation​:
Anchoring bias occurs when individuals heavily rely on the first piece of information they receive, influencing subsequent judgments or decisions. Awareness of anchoring bias can help individuals make more objective decisions by considering multiple sources of information and independently assessing the property's value, leading to mutually beneficial agreements.

Although choices B, C, and D are biases that prevent rational consumer choice, they are irrelevant in this scenario.

Explanation​:
The diagram shows an increase of quantity supplied, which is a movement along the supply curve, not a shift. An increase in quantity supplied is caused by an increase in demand.

Choices A, B, and D are incorrect because they shift the supply curve.

• Choices A and D shift the supply curve to the left
• Choice B shifts the supply curve to the right.

Explanation​:
Statement I: A more durable product will often lead to supply being more price-elastic as producers can store inventory when prices are too low. Consequently, an increase in price causes a proportionally larger increase in quantity supplied.

Statement II: Electronics are often assembled in factories and production can be increased in a relatively short period of time.

Statement III: Availability of substitutes is a determinant of PED, not PES.

Statement IV: The degree of luxury/necessity is a determinant of PED, not PES.