Economics - Chapter I (2)

What would cause an increase in the problem of scarcity?

• A reduction in resources

• A reduction in wants

• A rise in productivity

• A rise in the mobility of resources

Which item is a factor of production?

• The food a farmer produces

• The satisfaction a farmer gains from his work

• The tractor a farmer drives

• The wages a farmer pays his workers

Which form of air is an economic good?

Tip: For which one do you have to pay?

• Air at ground level

• Air from an air conditioning system

• Air above an ocean

• Air in a tropical rainforest

Which item used in the production of textiles by a firm would an economist classify as land?

• Sewing machines

• The factory

• Untrained workers

• Water taken from a river

What might be the opportunity cost of using a bus to transport students to school?

Tip: What else could you use the bus for?

• Increasing the earnings of the bus company

• Paying the wages to the driver

• Paying for the cost of petrol used

• Transporting a group of retired people on a day out

What is meant by ‘labour’ in economics?

Tip: Choose the most accurate answer

• Hard physical work used to produce manufactured goods

• Human mental and physical effort used in producing goods and services

• Natural resources used in the productive process

• Risk taking and organising the factors of production

What does a production possibility curve show?

• The maximum combination of two types of products that can be produced with given resources

• The prices of two types of products being produced

• The quantity of capital and consumer goods that people would like to be produced

• The relative profitability of capital and consumer goods

Which combination of economic concepts is illustrated by a production possibility curve?

Tip: What economic information can you get from PPC graph?

• Cost and price

• Demand and price

• Economic goods and free goods

• Opportunity cost and scarcity

What does a point outside a production possibility curve represent?

• A currently unattainable (impossible) position

• An inefficient position

• The maximum use of resources

• Unused resources

Which of the following is one of the four factors of production?

• productivity

• goods

• entrepreneurship

• services