Economics- AS Exam 1

Which of the following questions is associated with the basic economic problem?

• When to produce?

• Who should produce?

• What to produce?

• Where should production be located?

The fundamental concept of Economics about resources is that the resources are ;

• Equally distributed

• Unequally distributed

• Scarce

• Unlimited

Inputs are combined with technology to produce outputs. The fundamental inputs (also called factors of production) are;

• Land and capital

• Land and labour

• Land, labour, capital and resources

• Land, labour, capital, and entrepreneurship

Goods produced to produce other goods are called

• Consumer goods

• Capital goods

• Inferior goods

• Durable goods

Which of the following is not required for a country to be producing at a point on its Production possibility frontier?

• Full employment of labour.

• All producers using the latest technology

• Stable prices

• Maximum efficiency in production

The diagrams show movements from position X to Y on production possibility frontiers.

In which of the above diagrams does the movement from X to Y illustrate economic growth?

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• 
• 
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The diagram shows a production possibility frontier for an economy. Which of the following changes shows reduction in unemployed resources?

• W to V

• X to Z

• Y to X

• An outward shift of the whole production possibility frontier

Suppose you buy the book Economics by David King. What is the opportunity cost of your purchase?

• The money you paid for the book.

• The benefits of the next best alternative that was lost.

• The cost of producing the book.

• The time you spend studying the book

Short answer questions- Basic Economic Problem

Why do you need a subject like Economics? ( 3 marks )

What is the basic economic problem in a society? ( 2 marks)