2. GDP per capita in Switzerland is high. What is the reason why Swiss citizens still face the basic economic problem? A) Income in Switzerland is unevenly distributed. B) Inflation in Switzerland is high. C) Swiss citizens expect high living standards. +D) Swiss citizens have to make choices in consumption
3. What does a point of PPC for an economy represent?
a)Economic growth is falling b)Inefficient use of resources available +c)Maximum output possible with current technology d)Total demand for goods and services
4. Which points the currently the government would be able to produce?
a) X, Y , V, U
5. The diagram shows a production possibility curve(PPC) for country Z. Government policy is to move the economy from point X to Y. What is the most likely effect of this policy? +a) Living standards rise in the short run b) More capital goods are produced c) Prices of consumer goods increase d) Total output increases
6. The production possibility curve for the country has shifted from PPC one to PPC two. It was like this. It shifted to this point now. What would, what could have caused this shift. a) A decrease the rate of unemployment b) A fall in the birth rate c) Improved education +d) Outdated technology not being replaced
7. What is most likely to increase enterprise as a factor of production in an economy?
a) Decrease in government spending on education +b) Decrease in regulation on firms c) Increase in immigration d) Increase in taxation on firms
8. What is the usual effect of net immigration for high income country? +a) Increase in the size of the labor force b) Rise in the average age of the population c) Lower economic growth d) Reduced demand for housing
9. What would be likely to happen within a country if its government granted more work permits to doctors coming from other countries? a) Increased demand for doctors b) Increased productivity of doctors c) Increase salaries for doctors +d) Increase supply of doctors
10. What is most likely to increase the geographical mobility of labor?
a) An increasing the amount of credit available to firms +b) An increase in the quantity of low cost housing c) An increase in spending by terms on research and development d) An increase in spending by government on different decisions in training
11. A student defined opportunity cost as the alternative given up when a course of action is followed. Why is this definition inadequate? a) The next best alternative is not stress b) The type of economic system is not identified c) There's no mention of money values +d) There's no reference to finite resources and unlimited wants
12.The Chinese government is concerned about the level of poverty and the need for more resources in low income regions of the country. As a result, it is increasing its expenditure in those regions and reducing it in high income regions. Which economic concept does this government policy illustrate? a) Diseconomies of scale b) Market forces +c) Opportunity cost d) Specialisation
13. Which economic activity would be classified as macroeconomics?
a) Households spend less on holidays abroad +b) Income tax is increased by the government c) Wage rise for construction workers d) World coffee price rises due to poor weather
14. What is the feature of a market in equilibrium?
a) Demand exceeds supply b) No profits are earned +c) The market will clear d) There will be a surplus of products
15. The price of a good increases. What could cause this?
+a) The cost of raw materials b) The incomes of consumers rise c) The price of a compliment(goods) rises. d) The price of a substitute falls
16. What will result in a movement along the demand curve for a product? a) A change in tastes b) An increase in income +c) A rise in the price of the product d) A successful advertising campaign for the product.
17. Which statement correctly describes the shape of the demand curve for a normal good? a) It shows an inverse relationship between income and quantity demanded +b) It shows an inverse relationship between the price of the good and quantity demanded c) It shows a positive relationship between the price of the good and quantity demanded d) It shows a positive relationship between income and quantity demanded
18. What would not cause a shift in the demand curve?
a) A change in the price of a compliment b) A change in the price of a substitute +c) A change in the price of the good itself d) A change in consumers’ incomes
19. What is the name and cause of the movement from X to Y.
a) Contraction of supply caused by a decrease in demand b) Contraction of supply cost by an increase in demand c) Extension of supply caused by a decrease in demand +d) Extension of supply caused by an increase in demand
20. What would bring about the movement upwards along the supply curve for rice? a) Decrease in the productivity of farm workers b) Decrease in the profitability of rice production c) Increase in consumers’ incomes +d) Increase in farm workers wages
21. The diagram shows the supply of motor vehicles. What will cause a shift in the supply curve from s1 to s2? a) Decrease in the profits of suppliers b) A fall in the real incomes of customers +c) More efficient assembly line using robots d) A rise in the cost of motor vehicles components
22. What does joint supply mean?
a) A firm can choose between producing a range of use and goods b) A good has multiple uses +c) A good is a byproduct of the production process of another good d) Consumers consider cigarettes as compliments
23. In a given year, the world output of coal was 3.94 billion metric tons, at an average yearly price of $252 per metric ton. Several years later, world output was 3.66 billion metric tons, at an average yearly price of $120 per metric ton, what might have cost such a fall in the price of coal. a) Almost half the world's coal reserves were in just two countries b) The exhaustion of coal seams throughout the world +c) The switch to renewable sources of energy d) The use of coal as a raw material as well as a fuel
24. The diagram shows two demand curves and two supply curves. Which combinations of shifts in the demand and supply curves would result in a change in the equilibrium position from H to K? +a) Increase in demand and increase in supply b) Increase in demand and decrease in supply c) Decrease in demand and increase in supply d) Decrease in demand and decrease in supply 1. Business a) Capital b) Enteprise c) Labor d) Land
2. Demand for medical face masks exceeds supply during a disease outbreak. What is the most likely cost of this excess demand? a) Some consumers do not have effective demand b) The demand for medical face masks is priced inelastic in the short run +c) The price of medical face masks is fixed below the equilibrium price d) The supply of medical face masks is inelastic in the short run
3. Price plays a number of functions in the allocation of resources. Which statement best illustrates the function that relies upon consumer choice? a) A price fall can show consumers that a good is becoming less popular b) A price fall tends to persuade some producers not to stay in the market for the good +c) A price rise means consumers cannot afford to buy so much of a good d) A price rise tends to reduce competitiveness in the market for good
4. A good is most likely suitable to be provided by the market if it is?
a) excludable and non-rival +b) excludable and rival c) non-excludable and non-rival d) non-excludable and rival
5. In which case is the price system not a possible method of allocating resources? a) In the distribution of food stuff among the population b) In the hiring of workers by employers c) In the ownership of land for agricultural use +d) In the provision of public goods by the government
6. A local council provides a tap for drinking water in a town. Would this make drinking water a free good? a) No, because it is possible to exclude some people from using the tap +b) No, because it requires the use of scarce resources c) Yes, because it is available to all passers by d) Yes, because it is impossible to charge for it
7. What is not a characteristic of a mixed economy?
+a) The government has no role in setting prices b) The government manages taxation rights c) The government prevents firms from earning excessive profits d) The government provides services not provided by the private sector
8. In a planned economy, what will determine the allocation of scarce resources?
a) A mixture of private and central decision making +b) The decisions of central government c) The forces of demand and supply d) The revenue generated from direct and indirect taxes
9. An economy is changing from a planned economy to market economy, which action would be expected during this change? a) The replacement of fiscal policy to monetary policy b) The replacement of multinational companies by national companies +c) The replacement of nationalization by privatization d) The replacement of private property rights by common ownership
10. What best illustrates the process of privatization?
a) A single private shareholder acquires complete control of an organization b) The purchase of government bonds by private sector commercial organizations c) The purchase of shares in a private company +d) The transfer of public sector assets to the private sector
11. If an industry is currently state owned and state run. What does not represent a reason for it being privatized? a) Decisions will no longer be taken with political considerations in mind +b) The benefits of merit goods will be taken into account in decision making c) Its owners would have more incentive to make it operate profitably d) There will be greater incentives for managers to introduce modern technology
12. Assuming nothing else changes, which change in an economy's labor market will cause the production possibility curve to shift to the left? a) An increase in the worker immigration -b) An Increase in the retirement age c) An increase in labor productivity +d) An increase in the school leaving age
13.For instance, there is a diagram. What can be deducted from the diagram? a) Current living standards have fallen. -b) The economy has become more efficient c) There's been a rise in unemployment d) There's been an opportunity cost of consumer goods
14. Economic growth leads to increased levels of income and consumption per capital for the adult population, which circumstances are needed for this to happen in an economy? a) A change in technology that maintains the same level of output -b) An increase in economic efficiency through higher productivity of factor inputs c) A policy of progressive taxation to reduce inequalities d) A rise in the size of the working population due to immigration
