ECO162 - CHAPTER 1

The main problems of economics arise because

• Resources being scarce in relation to human wants

• Human weakness

• The absence of economic planning

• Incompetence of government

The basic economic problem is

• how to redistribute income equally in the society

• how to stabilize the prevailing price level in the economy

• how to allocate scarce resources given society's unlimited wants

• how to provide jobs for everyone in the labour force

The basic foundation of Islamic economics that refers to the responsibility of man in purifying his wealth according to the rules of Islam is

• Rububiyyah

• Khilafah

• Tazkiyyah

• Ukhwah

Opportunity cost is the

• cost of the best alternative forgone

• cost of undesirable alternative

• cost of factors of production

• cost of buying the best alternative

The Malaysian economy would best classified as

• free market economy

• planned economy

• mixed economy

• an Islamic economy

"The great increase in wage levels has led to the use of machinery in a particular production process". The statement above explains a basic economic problem of

• what to produce

• how much to produce

• how to produce

• for whom to produce

As a result of scarcity

• there is never enough of anything

• production has to be centrally planned

• things which are plentiful have relatively high prices

• individuals and communities have to choose from among alternatives

Which of the following will result to an outward movement of the productions possibilities curve?

• Economic recession happens

• Technological advancement

• A decline in population

• Political instability

Which of the following is not the characteristic of capitalist?

• Private ownership of resources

• Price is determined through price mechanism

• High competition among producers

• Central planning authority

What shape of this PPC

• Decreasing opportunity Cost

• Increasing opportunity cost

• Constant opportunity cost