AP3 Multiple choice economics

Which of the following lists contains only factors of production?

• Capital, government, money and suppliers

• Land, labour, capital and enterprise

• Land, labour, capital and money

• Machinery, buildings, output and profits

All production decisions have an opportunity cost. This means that when something is produced

• an identical alternative is given up

• the least valuable alternative is given up

• the next best alternative is given up

• there is no other alternative

A market starts in equilibrium and then demand falls. Which of the following is most likely to happen?

• A higher equilibrium price and equilibrium quantity

• A higher equilibrium price and lower equilibrium quantity

• A lower equilibrium price and equilibrium quantity

• A lower equilibrium price and higher equilibrium quantity

You put £100 into a bank account at the start of the year. One year later your account is worth £105. What is the interest rate you have received?

• 0.5%

• 5 %

• 10 %

• 15 %

The table shows the total costs of a firm. It sells its output for £5 each. How many units of output per day does the firm need to sell to maximise profits?

• 2

• 3

• 4

• 5

In a competitive market...

• the government must control the price

• the item that is traded must be a good

• the item that is traded must be a service

• there must be many sellers

Which of the following is predicted by the market forces of supply and demand?

• Equilibrium can only be achieved with government intervention

• Excess supply will occur if the price is below equilibrium

• If quantity demanded equals quantity supplied there is disequilibrium

• When there is excess demand the price will rise

The government decides to lower the rate of interest in the economy. Which of the following groups is most likely to be made worse off by this decision?

• Borrowers

• Large firms

• Savers

• Small firms

Which of the following statements is correct about a school teacher’s output?

• It is equal to zero because no goods are produced

• It is part of the primary sector

• It is part of the secondary sector

• It is part of the tertiary sector

Factors of production are combined to produce

• consumer wants

• opportunity costs

• output

• resources