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Section 1 & Section 2 MCQs

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2016 CSEC Economics (Section 1 - Nature of Economics) Quiz on Section 1 & Section 2 MCQs, created by Nikolas Reece on 10/06/2016.
Nikolas Reece
Quiz by Nikolas Reece, updated more than 1 year ago
Nikolas Reece
Created by Nikolas Reece almost 8 years ago
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Resource summary

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
Answer
  • Increase in wages
  • Increase in prices
  • Increase in imports
  • Improvement in technology

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?
Answer
  • The building
  • The bank’s vault
  • Shareholders of the bank
  • Special savings accounts for students

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?
Answer
  • Production market curve
  • Production demand curve
  • Production possibility curve
  • Production capability curve

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?
Image:
6284cad4-4041-4843-93da-8d338b33da3b (image/png)
Answer
  • OX1
  • OY1
  • OX2
  • OY2

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?
Image:
4803bb47-f746-4253-a9ce-51a7760f5c44 (image/png)
Answer
  • A
  • B
  • C
  • X

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?
Answer
  • Consumers only
  • Government only
  • Government and producers only
  • Government, producers and consumers

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?
Answer
  • All wages are equal
  • Goods do not have prices
  • There are no private shareholders
  • The profit motivate does not exist

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
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