Test 1 Economics

There are many definitions of Economics, but for modern economists, it is:

• an inquiry into the nature and causes of the wealth of nations

• a social science

• the study of how man allocates scarce resources, which have alternative uses, to achieve given goals

• a practical science of the production and distribution of wealth

Concerning the scope of economics, name the three main groups in the economy:

• households, firms and governments

• private sector, public sector and the informal sector

• upper class, middle class and lower class

• employees, employers and the unemployed

The average or unit cost is defined as the:

• cost of each unit of input

• average of total costs

• method used by companies to set prices

• cost of producing a single unit of output

For Yummy to realize income from the sale of their snacks, it must produce these goods at:

• the right customers

• the right time

• the right price

• all of the above

This sign was seen on the door of your favorite store. It means that the staff is:

• taking in new stock

• checking existing stock to calculate its stock turnover rate

• counting all missing or stolen goods

• checking how much old merchandise they have in store

The service you receive from your banker is usually customized to your individual needs. This characterization is called:

• Buyer involvement

• Demand fluctuation

• labour intensive

• Lack of Standardization

In theory, free goods have no opportunity cost. However, in Jamaica, there is one free good that has opportunity cost. Is it:

• sunlight

• air

• healthcare

• river water

Thorsten Veblen identified and defined this good as one where:

• an increase in price forces consumers to buy the alternative

• an increase in price encourages people to buy more of it

• an increase in price has no effect on the quantity demanded

• a decrease in price causes people to buy more of it

Since the Covid-19 pandemic, a retired dressmaker, has been making face masks for sale at a pharmacy just walking distance from her home. She had lots of material on hand and her trusty sewing machine. What would be her variable costs?

• Electricity and her wages

• Electricity and her rent

• Rent and wages

• transportation and rent

The four Factors of Production are:

• land, labor, capital, profit

• land, labor, interest, profit

• land, wages, capital, entrepreneurship

• land, labor, capital, entrepreneurship