WHSS Economics: Section 1 Prep

In a market economy, what does the entrepreneur decide? A the combination of resources used B the demand for the product C the equilibrium price of the product D the level of profits

• A

• B

• C

• D

A factory working at full capacity is producing tennis racquets and golf clubs. The management decides to produce fewer racquets and more clubs because of an increase in demand for golf clubs. What is the opportunity cost of producing more golf clubs? A the cost of retraining some workers to make golf clubs B the cost of transporting and selling the extra golf clubs produced C the materials bought to make extra golf clubs D the tennis racquets that will not now be produced

• A

• B

• C

• D

A business has two owners. They have limited liability. Its shares are not sold on the stock exchange. What type of business is this? A partnership B private limited company C public corporation D public limited company

• A

• B

• C

• D

What would prevent an Egyptian company being classified as a multi-national company?

A It concentrates on one stage of production only.

B It employs only Egyptians as managers.

C It manufactures only in Egypt.

D It uses other firms to transport its goods.

• A

• B

• C

• D

What is most likely to be the main function of a central bank?

A controlling the money supply

B investing in commerce and industry

C issuing and processing credit cards

D making loans to individuals

• A

• B

• C

• D

Which action is evidence that a country is a planned economy?

A A central bank plans an interest rate change.

B A government plans the allocation of all resources.

C A local authority plans a new library.

D A ministry of finance plans the annual budget.

• A

• B

• C

• D

Which statement best explains why drought is an economic problem?

A Drought cannot be controlled.

B Rainfall is unreliable.

C The effects of drought involve the government.

D Water is a scarce good.

• A

• B

• C

• D

What might increase the use of money as a medium of exchange?

A an increase in income tax

B an increase in interest rates

C an increase in savings

D an increase in specialisation

• A

• B

• C

• D

A state-owned industry is sold to the private sector. The industry consists of a number of very large factories. Which is the most likely change in business organisation to result from this?

A from private company to public corporations

B from public company to public corporations

C from public corporation to public companies

D from public corporation to private companies

• A

• B

• C

• D

In 2002 the trade union representing workers on the London Underground public transport system called a strike. Which condition would make a strike least likely to be successful?

A The demand has to be met at a certain time.

B The product or service is regarded as a necessity.

C The union represents a high percentage of the workforce.

D There is a wide range of alternative services.

• A

• B

• C

• D