Section 1 & Section 2 MCQs

Which of the following is the MAJOR problem facing all economies?

An ‘economy’ is BEST described as a system where

Sita and Peter are planning to buy a new house. Which of the following factors should not affect the couple’s decision?

A student has daily allowance of $20 with which he can purchase chicken and chips or a burger, but NOT both. If he purchases the chicken and chips, the opportunity cost of his decision will be

A ‘free good’ is BEST described as a good

Which of the following is NOT a primary product?

Which of the following is an advantage of a market economy?

An outward shift in the production possibility curve can be caused by an

Which of the following are NOT considered factors of production in the bauxite industry?

Which of the following is NOT an example of a factor of production in a commercial bank?

Why do consumers have to make choices among the goods and services that they purchase?

The Government of Country X decides to switch resources from investment goods to crop production. The opportunity cost of this decision is the

An economy produces two goods, namely sugar and bauxite. What name is given to the curve which shows the maximum amount of bauxite that can be produced for every given amount of sugar?

Prices of goods in market economies fluctuate while prices of goods in planned economies tend to be fixed. The MOST likely reason for this difference is that, in the market economy,

Item 15 refers to the diagram below which shows the production possibility curve for an economy that produces bananas (X) and oranges (Y). What is the greatest amount of oranges that can be produced at Point B?

Item 16 refers to the diagram below which shows the production possibility curve for two goods: butter and guns. At what point in the diagram are resources underemployed?

A MAJOR disadvantage of a planned economy is that it

In which of the following economic systems does the state own ALL the factors of production EXCEPT labour?

Sam and Su started a catering business. They organized the factors of production and pooled their financial resources to produce goods and services. Which factors of production should Sam and Su be classified as?

Which of the following determines the allocation of resources in a mixed economy?

An economy in which ALL of the resources EXCEPT labour are owned by the state can be described as a

Which of the following features are characteristics of a fully planned economy?

Many developing countries have changed their economies from a command economy to a market based economy in order to increase

The Sugar industry in New Island uses a high ratio of labourers to capital as inputs in the production of sugar. Which of the following economic questions is being answered in this production arrangement?

Joe uses one plot of land and 65 seedlings to do his farming. Each seedling costs $8 and he rents the land for $200. The cost of the land represents his