AS Economics Unit 1: Top 50

People plant flowers in a local park. Which statement is correct?

A Flowers in parks are a public good because people can enjoy them at no charge.

B Flowers in parks are a public good because they are owned by local people and are not for profit.

C Flowers in parks are not a public good if local people can limit the number of visitors to the parks.

D Flowers in parks are not a public good if they are individual, not identical, in nature.

• A

• B

• C

• D

A government decides that all non-essential businesses must close for three months due to a disease pandemic. What is an opportunity cost of this policy?

A increased leisure time for employees

B lives that are saved due to reduced disease levels

C the production of goods by essential businesses

D the loss of goods from the closed businesses

• A

• B

• C

• D

The diagram shows an economy’s production possibility curve. The economy produces combinations of goods and services using all available resources.

What does the production possibility curve indicate for goods and services?

A constant returns to scale in the production of both goods and services

B diminishing returns to scale in the production of both goods and services

C increasing returns to scale in the production of both goods and services

D infinite returns to scale in the production of both goods and services

• A

• B

• C

• D

Which economic conditions are likely to encourage an increase in enterprise?

• A

• B

• C

• D

A good is most suitable to be provided by the market if it is

A excludable and non-rival.

B excludable and rival.

C non-excludable and non-rival.

D non-excludable and rival.

• A

• B

• C

• D

What is the definition of long run?

A the time period when all factors of production are specialised

B the time period when all factors of production are variable

C the time period when all key inputs into production are variable

D the time period when at least one factor of production is fixed

• A

• B

• C

• D

The table states the consequences of two macroeconomic policies. What correctly identifies whether the statements are normative or positive?

• A

• B

• C

• D

An economy is changing from a planned economy to a market economy. Which action would be expected during this change?

A the replacement of fiscal policy by monetary policy

B the replacement of multinational companies by national companies

C the replacement of nationalisation by privatisation

D the replacement of private property rights by common ownership

• A

• B

• C

• D

A local council provides a tap for drinking water in a town. Would this make drinking water a free good?

A No, because it is possible to exclude some people from using the tap.

B No, because it requires the use of scarce resources.

C Yes, because it is available to all passers-by.

D Yes, because it is impossible to charge for it

• A

• B

• C

• D

Food prices in a country increased by 20% in three months due to an infectious virus. Which statement about the cause of this rise in food prices is normative?

A Consumers were scared of running out of food.

B Farm workers demanded higher wages to cover extra hours worked.

C Supply of foreign food was reduced because of closed borders.

D Transport costs increased by 10%.

• A

• B

• C

• D