Question 1
Question
Which of the following is the MAJOR problem facing all economies?
Answer
-
Allocating scarce resources among competing users
-
Achieving an equal distribution of income
-
Preventing the depletion of natural resources
-
Achieving a fair distribution of wealth
Question 2
Question
An ‘economy’ is BEST described as a system where
Answer
-
Suppliers produce all the goods and services needed by the consumers
-
Resources are used by manufacturers to produce goods and maximize profits
-
All the goods and services used by the citizens of a country are provided by the government
-
Resources are used to produce goods and services to meet the needs and wants of society
Question 3
Question
Sita and Peter are planning to buy a new house. Which of the following factors should not affect the couple’s decision?
Answer
-
Their joint monthly income
-
The possibility of a job promotion for Peter
-
The high cost of renting their current home
-
The acquisition of a new home by Sita friend
Question 4
Question
A student has daily allowance of $20 with which he can purchase chicken and chips or a burger, but NOT both. If he purchases the chicken and chips, the opportunity cost of his decision will be
Answer
-
The burger he gave up
-
The satisfaction he gets from burgers
-
The price of the chicken and chips
-
The satisfaction he gets from the chicken and chips
Question 5
Question
A ‘free good’ is BEST described as a good
Answer
-
That is given away by a retailer to promote the sale of another good
-
Which gives no satisfaction to consumers
-
Which has an infinite elasticity of supply
-
Whose opportunity cost is zero
Question 6
Question
Which of the following is NOT a primary product?
Answer
-
Bauxite
-
Banana
-
Furniture
-
Petroleum
Question 7
Question
Which of the following is an advantage of a market economy?
Answer
-
There is equality of income
-
It provides an incentive to produce
-
It reduces pollution and congestion
-
Price control measures can be effected
Question 8
Question
An outward shift in the production possibility curve can be caused by an
Question 9
Question
Which of the following are NOT considered factors of production in the bauxite industry?
Answer
-
Companies that use bauxite
-
Lands on which mines are located
-
Workers employed to work on the mines
-
Persons who invest their capital to carry out mining operations
Question 10
Question
Which of the following is NOT an example of a factor of production in a commercial bank?
Question 11
Question
Why do consumers have to make choices among the goods and services that they purchase?
Answer
-
Their wants are scarce and their resources are limited
-
Their resources are insufficient to satisfy all their wants
-
Their resources increase more rapidly than their wants
-
They receive most of their goods and services at no cost.
Question 12
Question
The Government of Country X decides to switch resources from investment goods to crop production. The opportunity cost of this decision is the
Answer
-
Profit earned by farmer
-
Rent of the land on which crops are grown
-
Reduction in investment goods
-
Wages earned by farm workers
Question 13
Question
An economy produces two goods, namely sugar and bauxite. What name is given to the curve which shows the maximum amount of bauxite that can be produced for every given amount of sugar?
Question 14
Question
Prices of goods in market economies fluctuate while prices of goods in planned economies tend to be fixed. The MOST likely reason for this difference is that, in the market economy,
Answer
-
Profits are lower
-
Producers are never efficient
-
Buyers and sellers determine prices
-
There are higher unemployment levels
Question 15
Question
Item 15 refers to the diagram below which shows the production possibility curve for an economy that produces bananas (X) and oranges (Y).
What is the greatest amount of oranges that can be produced at Point B?
Question 16
Question
Item 16 refers to the diagram below which shows the production possibility curve for two goods: butter and guns.
At what point in the diagram are resources underemployed?
Question 17
Question
A MAJOR disadvantage of a planned economy is that it
Answer
-
Causes inequality in the distribution of income
-
Discourages individual initiative and enterprise
-
Results in widespread unemployment
-
Causes high rate of inflation
Question 18
Question
In which of the following economic systems does the state own ALL the factors of production EXCEPT labour?
Answer
-
A mixed economy
-
A market economy
-
A planned economy
-
A subsistence economy
Question 19
Question
Sam and Su started a catering business. They organized the factors of production and pooled their financial resources to produce goods and services. Which factors of production should Sam and Su be classified as?
Answer
-
workers
-
investors
-
managers
-
entrepreneurs
Question 20
Question
Which of the following determines the allocation of resources in a mixed economy?
Question 21
Question
An economy in which ALL of the resources EXCEPT labour are owned by the state can be described as a
Answer
-
Free economy
-
Mixed economy
-
Capitalist economy
-
Command economy
Question 22
Question
Which of the following features are characteristics of a fully planned economy?
Question 23
Question
Many developing countries have changed their economies from a command economy to a market based economy in order to increase
Answer
-
Government control
-
Efficiency
-
Subsidies
-
Price control
Question 24
Question
The Sugar industry in New Island uses a high ratio of labourers to capital as inputs in the production of sugar. Which of the following economic questions is being answered in this production arrangement?
Answer
-
How much to produce
-
For whom to produce
-
What to produce
-
How to produce
Question 25
Question
Joe uses one plot of land and 65 seedlings to do his farming. Each seedling costs $8 and he rents the land for $200. The cost of the land represents his
Answer
-
average cost
-
fixed costs
-
marginal cost
-
variable costs