Scarcity, choice and opportunity cost

Scarcity means that:

• 1 people do not work
• 2 there is no food
• 3 goods are expensive
• 4 resources are limited compared with wants

The opportunity cost of a choice is:

• 1 the cost of production
• 2 the price of the good
• 3 the money spent
• 4 the next best alternative given up

Which one is NOT a factor of production?

• 1 Enterprise
• 2 Labour
• 3 Money
• 4 Land

The reward for labour is:

• 1 interest
• 2 wages
• 3 profit
• 4 rent

The reward for land is:

• 1 profit
• 2 interest
• 3 rent
• 4 wages

A point inside the production possibility curve shows:

• 1 impossible output
• 2 unemployed or wasted resources
• 3 economic growth
• 4 full employment

An outward shift of the production possibility curve shows:

• 1 scarcity ending
• 2 rising prices
• 3 economic growth
• 4 unemployment

Which of the following is a basic economic problem?

• 1 What to produce
• 2 Where to sell
• 3 Which taxes to pay
• 4 How to advertise

An economy in which the government owns the resources and makes the decisions is called:

• 1 a free economy
• 2 a mixed economy
• 3 a market economy
• 4 a planned economy

The study of the whole economy, such as national income and inflation, is:

• 1 macroeconomics
• 2 statistics
• 3 accounting
• 4 microeconomics

Which statement is a positive statement?

• 1 Petrol prices rose by 5 % last month.
• 2 The government ought to lower taxes.
• 3 Wages are unfairly low.
• 4 Petrol prices should be lower.

A farmer uses land to grow wheat instead of rice. The rice that could have been grown is the:

• 1 profit
• 2 wage
• 3 rent
• 4 opportunity cost