VCE Economics Unit 1 AOS1

Which is the definition of economics?

• Making, providing, purchasing, or selling goods or services.

• The study of how to use our limited resources wisely and in ways to make individuals and society better off materially to increase living standards.

• The study of how to use our unlimited resources in ways to make individuals and society better off to increase living standards.

• The branch of biology that deals with the relations of organisms to one another and to their physical surroundings.

Select the two branches of economics:

• Microeconomics

• Relative scarcity

• Opportunity cost

• Macroeconomics

What is microeconomics?

• A branch of economics that looks at the factors that influence the various parts (i.e operations, profitability) that make up the overall Australian economy.

• The inputs used in production or supply of goods and services.

• The branch of economics concerned with large-scale or general economic factors, such as interest rates and national productivity.

• The study of economics during junior high school years.

What is macroeconomics?

• The value of the next best alternative foregone.

• The branch of economics concerned with large-scale or general economic factors, such as interest rates and national productivity.

• The expenditure of consumers on goods and services.

• Economic claims that are opinion-based.

True or false: Normative economics is fact-based and can be verified using factual information.

• False

• True

True or false: Normative economics is opinion-based and cannot be verified.

• False

• True

Select the two factors that limit/determine GDP:

• Volume or quantity of resources available for use.

• PPF's

• How efficiently available resources are being employed.

• Crime rates

True or false: Relative scarcity arises because the volume and efficiency of resources available is unlimited, relative to people's needs and wants which are unlimited.

• True

• False

If an economy were to produce inside the PPF, what would this indicate?

• Over-utilisation of resources.

• Scarcity.

• Underutilisation of resources.

• Technical efficiency.

What does a movement from one point to another along a PPF indicate?

• Underutilisation of resources.

• A country is allocating more to the production of one good and less to another.

• Life expectancy has increased.

• The Law of Diminishing Marginal Utility.