Economics -

1. Two telecommunications companies are to merge to finance investments in new technology, which will be more efficient and require smaller buildings. Three hundred workers will lose their jobs.

What will happen to the factors of production used?

• A

• B

• C

• D

1. A country with a low income per head discovers large quantities of oil, which eventually makes everybody better off.

Why is the basic economic problem of scarcity not solved by this discovery?

• A People may not get jobs in the oil industry.

• B People’s wants are always changing and increasing.

• C Prices of oil can fluctuate on the world market.

• D Production of oil can damage the environment.

1. Which statement about factors of production is correct?

• A Capital is the money people keep in the bank.

• B Enterprise is found more in service industries than in manufacturing industries.

• C Labour includes only those who work using their hands.

• D Land includes resources found in or under the sea.

China earns enough income to purchase large quantities of natural resources from developing countries.

Which statement explains this situation?

• A China does not experience the economic problem of scarcity.

• B Supplies of natural resources in China are limited relative to demand.

• C There are unlimited supplies of natural resources in developing countries.

• D There is an excess stock of land in China.

A farmer pays a landowner for the use of a field.

What is the income to the landowner called?

• A interest

• B profit

• C rent

• D wages

What makes choice an important element in the basic economic problem?

• A Increased demand leads to higher market prices.

  .

• B Limited resources have many alternative uses.

• C Reaching a market equilibrium may take a long time.

• D Scarce economic resources are distributed equally

1What is a factor of production?

• A an advantage of producing on a large scale

• B a resource used to produce goods and services

• C a sub-section of a manufacturing process

• D a unit of output

A government is faced with the choice of spending on either education or healthcare.

Of what is this an example?

• A conservation of resources

• B free goods

• C opportunity cost

• D factors of production

What makes choice an important element in the basic economic problem?

• A Increased demand leads to higher market prices.

  .

• B Limited resources have many alternative uses

• C Reaching a market equilibrium may take a long time.

• D Scarce economic resources are distributed equally.

A friend said his French grandmother kept switching off the lights but left the tap running. His Namibian relative left the lights on while shouting at him to turn off the water.

Which availability of resources and level of prices would make economic sense of these consumer actions?

• A

• B

• C

• D