Economic system

Which one of the following is not the question referred to resource allocation?

• What to produce?

• How to produce?

• Who to produce?

• Who to produce for?

An economy is an area where people and firms ____________________

An economy operates entirely as a market system.

Which type of service would not be provided in such an economy?

• commercial banking services

• free government health services

• private educational services

• profitable retail services

What is the government most likely to produce in a mixed economy?

• all the services and none of the goods

• amounts of goods and services equal to those of the private sector

• no goods and services

• some of the goods and services

Which pair of economic institutions can be found in a market economy?

• local government and charities

• private company and commercial banks

• nationalised industries and partnerships

• stock exchange and public corporations

In a mixed economy, the output is produced by

• private enterprise and individuals.

• the market alone.

• the state alone.

• the state and private enterprise.

What can be found in a mixed economy but not in a market economy?

• a national economic development plan

• an unequal distribution of income and wealth

• the operation of the price mechanism

• the private ownership of factors of production

The production possibility curve (PPC) shows the hours per day a student has for either entertainment or revision.

The student revises for 3 hours a day. As exams approach, the student decides to revise for 9 hours a day.

What is the opportunity cost of this decision?

• 3hours of revision

• 6 hours of entertainment

• 6 hours of revision

• 9 hours of entertainment

The production possibility curve (PPC) shows the hours per day that a person has for either work or leisure.

This person works 6 hours a day but then decides to work 9 hours a day.

Which movement shows this change?

• T to R

• T to U

• U to V

• U to T

A person makes sandwiches at home for five hours each day. She makes 20 sandwiches per hour, and she sells each sandwich for $2 each.

What is the opportunity cost if she takes a holiday on a working day?

• $2

• $40

• 20 sandwiches

• 100 sandwiches