Final Economics Exam - Grade 12

What is the opportunity cost of a transfer payment such as unemployment benefit?

• The goods and services that could be produced with the money

• The resources that are being diverted into non-productive uses

• There is no opportunity cost involved

• The loss of potential output and taxation

One of the consequences of oil running out, ceteris paribus, would be that?

• Demand for alternatives such as hydrocarbons will fall

• The relative price of alternatives such as hydrocarbons will rise in the long run

• The price of oil will fall in the future

• There would be a greater incentive to search for oil in more marginal oil fields

Which of the following is a normative statement?

• In March 2014 Japan’s trade deficit quadrupled as its export growth slowed down and energy import prices increased.

• The inflation rate in Singapore is 5%, which is considered too high

• China’s economy grew by 7.4%, which was higher than analysts were predicting

• Unemployment in Brazil is at a record slow

Which of the following is not an example of the factor of production capital?

• A delivery van

• A bank loan

• A fishing boat

• A driving license

Opportunity costs are said to be increasing if;

• The costs of producing one good in terms of another is falling

• Proportionately more of one goods is given up in the production of another

• Proportionately less of one good is given up in the production of another

• The production possibility curve is concave to the origin

Which of the following is the least liquid financial asset?

• A government bond

• Cash

• A bank deposit

• A savings account

One of the benefits of a free market economy is;

• Fluctuating prices of goods and services

• A lower rate of inflation

• Stable levels of unemployment

• Greater choice

A free good has which of the following characteristics?

• Is rivalrous and excludable

• Is non-rivalrous and non-excludable

• Is non-rivalrous and excludable

• Is given freely to consumers

Which of the following statements is true regarding demerit goods?

• Private costs are greater than social costs

• The have significant private and external costs

• They are harmful and should be banned by the government

• They are overproduced and under-consumed by society

One of the problems of debt forgiveness is that it could lead to financial indiscipline in the future. This is known as;

• Moral hazard

• Adverse selection

• Paradox of thrift

• Market failure