IGCSE Basic Economic Problem

Which points on the PPC / PPF represent the economy operating at maximum output

• C & D

• C

• D

• A & C

• A & B

What does Gross Domestic Product

mean?

• The total value of all goods and services a country imports.

• The total value of all goods and services a country exports.

• The total value of all goods and services produced within a country in one year.

• The net loss in profits within a country due to imports.

The___________ a country’s GDP, the better the country’s standard of living.

• lower

• greater

• smaller

• answers 1 and 3 are correct

Which cause of economic growth would involve the least cost for present and future generations of a country’s population?

• increased exploitation of a country’s mineral resources

• investment financed by borrowing from abroad

• investment financed by high rates of domestic savings

• technological innovations in productive processes

Which combination of factors is most likely to result in economic growth?

• an increase in management productivity together with a reduction in the hours worked per employee

• increased educational enrollment together with an increase in business regulation

• the discovery of a new raw material deposit together with significant emigration of labour

• the invention of a technology together with the investment to use it in the economy

A nation's _____ determine the strength of its economy

• productive resources

• goods & services produced

• others do not

• per person

• weaker economies

Investment in better machines, updated factories, and new technology leads to _____ being produced

• increase in GDP

• stronger its economy

• technology

• more goods & services

• boosts a country's exports

What is the basic economic problem that all societies face?

• Scarcity of resources

• Inflation

• Unemployment

• Trade imbalance

Which of the following best describes opportunity cost?

• The cost of an alternative that must be forgone to pursue a certain action

• The total cost of all resources used in production

• The cost of labor in a given market

• The cost of living in a particular area

What is meant by the term 'scarcity' in economics?

• Unlimited resources to meet limited wants

• Limited resources to meet unlimited wants

• Equal distribution of resources

• Excess supply over demand