fop
What is meant by scarcity in economics?
A. Lack of education
B. Unlimited wants with limited resources
C. Rising prices
D. Falling production
B. Unlimited wants with limited resources
What is the opportunity cost of choosing to study economics instead of working?
A. The money earned from working
B. The enjoyment of studying
C. The books used
D. The time spent in school
A. The money earned from working
What causes a movement from point A to B along a PPC curve?
A. Increase in economic efficiency
B. Reallocation of resources between two goods
C. Investment in capital
D. Unemployment falls
B. Reallocation of resources between two goods
A farmer uses drones to monitor crops. This is an example of using:
A. Labour and enterprise
B. Capital and land
C. Labour and capital
D. Land and enterprise
B. Capital and land
. A country can produce either 300 cars or 600 motorcycles. What is the opportunity cost of producing 1 car?
A. 2 motorcycles
B. 0.5 motorcycle
C. 3 motorcycles
D. 1.5 motorcycles
A. 2 motorcycles
Why does scarcity lead to the need for choice?
A. Resources are easily available
B. Unlimited wants must be satisfied
C. Governments always provide free goods
D. Resources are limited
D. Resources are limited
What does opportunity cost represent?
A. Total cost of all choices
B. The next best alternative foregone
C. Future cost of decisions
D. Government taxes
B. The next best alternative foregone
Which of the following would likely cause an outward shift of the PPC?
A. Decrease in working population
B. Depletion of raw materials
C. Introduction of automation
D. Reduction in demand
C. Introduction of automation
Which of the following is not an example of capital?
A. Delivery truck
B. Road network
C. Cash in bank
D. Assembly machine
C. Cash in bank
If a student has 10 hours of study time and can prepare for either 5 chapters of Economics or 10 chapters of Business Studies, what is the opportunity cost of preparing 1 Economics chapter?
A. 2 Business chapters
B. 0.5 Business chapter
C. 5 Business chapters
D. 1 Business chapter
A. 2 Business chapters
What is the basic economic problem?
A. How to avoid taxes
B. Scarcity and choice
C. How to produce everything
D. Who controls the government
B. Scarcity and choice
Which of the following best represents the concept of opportunity cost in resource allocation?
A. Buying luxury goods instead of necessities
B. Shifting labour from agriculture to manufacturing
C. Producing both goods on the PPC
D. Saving instead of spending
B. Shifting labour from agriculture to manufacturing
If a country has zero unemployment and is producing on the PPC, what must happen for it to produce more consumer goods?
A. Increase government subsidies
B. Reduce exports
C. Reallocate resources from capital goods
D. Lower interest rates
C. Reallocate resources from capital goods
Which of the following increases the productivity of labour?
A. Longer working hours
B. Increase in wages
C. Improved training and education
D. Reduction in taxes
C. Improved training and education
An economy produces either 800 computers or 400 TVs. Due to limited resources, it produces 600 computers. What is the opportunity cost in terms of TVs?
A. 100 TVs
B. 200 TVs
C. 300 TVs
D. 400 TVs
B. 200 TVs
Explanation: 600/800 = 75% of computers ⇒ 75% of 400 TVs = 300; opportunity cost = 400 - 300 = 100 TVs
Which of the following is a free good?
A. Air
B. Education
C. Water in a bottle
D. Electricity
A. Air
In which situation is opportunity cost zero?
A. A person choosing between two jobs
B. Using spare land to build a factory
C. Receiving a scholarship to study abroad
D. Producing one good on the PPC
C. Receiving a scholarship to study abroad
Which condition must be met for a country to operate on its PPC?
A. Maximum inflation
B. Perfect competition
C. Full and efficient use of resources
D. Constant opportunity cost
C. Full and efficient use of resources
Which statement is most accurate?
A. Entrepreneurs receive interest for their risk
B. Labour receives rent for services
C. Capital receives profit
D. Enterprise coordinates land, labour, and capital
D. Enterprise coordinates land, labour, and capital
A factory uses its budget to make 1,000 chairs or 500 tables. If it chooses to make 600 chairs, what is the opportunity cost in terms of tables?
A. 200 tables
B. 100 tables
C. 300 tables
D. 250 tables
B. 100 tables
Explanation: 600/1000 = 60% ⇒ 60% of 500 tables = 300, so 200 tables lost
Which of the following is not an example of the basic economic problem?
A. A firm deciding how to price a new product
B. A student choosing between sports and studies
C. A worker being paid overtime
D. A family budgeting for groceries
C. A worker being paid overtime
Which event would most likely shift the PPC inward?
A. Immigration of skilled workers
B. Decrease in capital investment
C. Increase in exports
D. Discovery of new resources
B. Decrease in capital investment
A PPC is bowed outward from the origin due to:
A. Equal allocation of resources
B. Constant costs
C. Increasing opportunity cost
D. Perfect substitutes
C. Increasing opportunity cost
A farmer has 50 acres of land. He can grow either 25 tons of wheat or 50 tons of maize. If he grows only wheat, what is the opportunity cost of producing 1 ton of wheat?
A. 1 ton of maize
B. 0.5 tons of maize
C. 2 tons of maize
D. 5 tons of maize
C. 2 tons of maize
Explanation: 50 maize / 25 wheat = 2 maize per wheat
A company earns $50,000 by making product A and $80,000 by making product B. If it chooses to make A, what is the opportunity cost?
A. $50,000
B. $30,000
C. $80,000
D. $130,000
C. $80,000