Economic Problem

Identify the correction definition of scarcity.

• A decision made from different alternatives.

• The next best alternative foregone when a decision is made.

• Resources are unlimited in relation to limited wants

• Wants are unlimited when compared to our limited resources, time and money

Identify the scarce resource in the example below:

James has 2 hours after school and he is trying to decide whether to go to the gym, do his maths homework or play basketball with his mates.

• Money

• Time

• Opportunity Cost

• Choice

Identify the opportunity cost, assuming James ranks the following alternatives from best to worst:

1. Playing basketball with his mates.

2. Doing his maths homework

3. Going to the gym.

• Playing basketball with his mates.

• Doing his maths homework

• Going to the gym

All of the following are assumptions required for the production possibility frontier (PPF) or curve (PPC), except for?

• Resources are fixed in quantity and quality

• Technology is fixed

• Resources cannot be switched from one form of production to another

• It can only show 2 types or groups of goods.

Select the two correct statements.

• X is unobtainable with existing resources and technology

• A, B, C and D are all efficient

• Y is unobtainable with existing resources and technology

• X represents efficient resource use

Identify the production decision that represents economic growth.

• A to B

• X to B

• B to Y

• Staying at B

Calculate the opportunity cost of increasing capital goods production from 30 to 45 units.

• 80 units of consumer goods

• 60 units of consumer goods

• 40 units of consumer goods

• 20 units of consumer goods

Calculate the opportunity cost of the decision to increase production of consumer goods from 60 to 80 units.

• 15 units of capital goods

• 30 units of capital goods

• 45 units of capital goods

• 60 units of capital goods

Identify the change to the PPF if there is an increase in the technology used to produce capital goods.

• 
• 

Identify the cause of the change in the PPF shown.

• An improvement in technology for both goods

• An increase in resources for consumer goods only

• An increase in resources for capital goods only

• An improvement in technology for consumer goods only