Chapter 1

What is not one of the four factor of production?

• Labour

• Land

• Entrepreneur

• Capital

Which of the following best describes the economic problem?

• Limited wants and unlimited resources

• Increase in businesses and decrease in investments

• Finite resources and infinite wants

• Scarcity due to an increase in the factors of production

Which of the following are capital used by an ice cream making firm?

• Production engineers

• Car assembly machine

• Ingredient mixer

• Vanilla extract

What can cause the improvement in quality of the factors of production

• Increase in immigration

• Decrease in the death rate

• Discovery of new ore mines

• Investments in education

Which factor of production is the least geographically mobile

• Land

• Labour

• Capital

• Enterprise

What is the opportunity cost of an individual starting their own business?

• Profits from the business

• Increased spending power

• Salary from working an ordinary job

• Decrease in expenses

Which of the following can cause the Production Possibility Curve (PPC) to shift outwards?

• Increase in income tax

• Depletion of natural resources

• Increase in immigration

• Reduction in government spending

Which is an example of a free good?

• Roads

• Air

• Bricks

• Clean water

Which of the following movements in the PPC show a decrease in efficiency?

• A to B

• E to B

• D to C

• A to D

Which is an example of a renewable resource?

• Petroleum

• Sunlight

• Oil

• Uranium