FPEC1014 TOPIC 1

Which of the following is not a resource?

• land

• money

• capital

• labour

Economics is the study of ?.

• how to make money

• how to use up all resources

• people making choices because of scarcity

• how to make a profit from a business

Scarcity exists because _ .

• human wants are unlimited but resources are limited

• people want to make money

• some countries have limited resources

• some businesses are poorly managed

Along the production possibility curve, an increase in the production of one good can be achieved only by ? .

• decreasing the production of another good

• increasing the production of another good

• production of another good remains constant

• producing outside the curve

Opportunity cost is the _ .

• price of a good

• second best option given up when making a choice

• loss to businesses

• cost to produce goods

An outward shift in the production possibility curve is caused by ?.

• the increase in price of goods

• entrepreneurship

• a decrease in labour

• an advancement in technology

Consumer sovereignty occurs in a ? .

• market economy

• mixed economy

• command economy

• socialist economy

An essential feature of a market economy is that _ .

• there is not much competition in the market

• resource allocation responds to consumer demands

• products are not advertised

• the government makes all decisions

Based on the table above, draw the production possibility curve.

• straight line downward sloping

• straight line upward sloping

• concave donward sloping

• bowed outward

Calculate the opportunity cost to produce 5 units of good X.

[answer written as 8Y]