iGCSE Economics Ch 1 - 3 Review Quiz

1 What is the basic economic problem faced by all societies?

• Achieving happiness

• An inefficient economic system

• Rewarding factors of production

• Scarcity of Resources

Which product is most likely to be classified as a free good?

• Birthday presents

• Public transportation

• Seawater

• State (government-funded) education

Which option is not an example of capital as a resource?

• Computers

• Factory

• Machinery

• Natural resources

Which event is most likely to cause an increase in the average wage of labour?

• A decrease in the national minimum wage

• An increase in the national minimum wage

• Government tax policies

• Net migration of labour into the country

Juke bought a new Xbox One games console for $295 but has never used it.The second-hand value of his Xbox One is $195. What is the opportunity

cost of Juke owning the games console?

• 0$

• 100$

• 195$

• 295$

What is the opportunity cost to the economy if the government decidesto build a new motorway (highway)?

• The cost of relocating and compensating residents in order to build the motorway

• The money spent on building the motorway

• The other projects that could have been undertaken had the motorway not been built

• The overall cost to taxpayers of financing the motorway project

What is meant by ‘opportunity cost’?

• The best alternative forgone

• The cost of the item selected

• The cost of exploring business opportunities

• The labour used in producing the product

A person decides to go to the university for three years, to study economics. If he had not gone, he could have taken up a job which would have paid him $15 000 a year. After he graduates he expects to find a job paying him $40 000 a year. What is the opportunity cost of going to the university for him?

• 15 000 $

• 40 000 $

• 45 000 $

• 120 000 $

What are the characteristics of a free good?

• Has an opportunity cost. Takes resources to produce it

• Has an opportunity cost. Takes no resources to produce it

• Has no opportunity cost. Takes no resources to produce it

• Has no opportunity cost. Takes resources to produce it

On his birthday, Kamran receives $200 from his aunt, $50 of which he decides to save. Heis taken out by his father for lunch. His father pays the bill. Kamran spends the afternoon playing football. Which of these activities involves an opportunity cost?

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