Grade 11 Mid 1 Review

Why do consumers have to make choices when spending their income?

• Advertising encourages consumer spending.

• Consumers have unlimited incomes.

• Consumer wants cannot all be satisfied with their income.

• Not all products will be attractive to consumers.

• Consumers have limited wants.

A doctor has very long working hours and a high level of stress. She can become a teacher instead of continuing as a doctor. What is the opportunity cost of choosing to continue as a doctor?

• the risk of mistakes caused by tiredness

• the possible costs of illness caused by high stress levels

• the risk of mistakes caused by lack of knowledge

• the potential salary as a teacher

• the retraining costs of becoming a teacher

What is the definition of long run?

• the time period when all factors of production are specialised

• the time period when all factors of production are variable

• the time period when all factors of production are fixed

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

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

What does the phrase 'ceteris paribus' mean?

• All the resources used are of equal quality.

• The price mechanism rations scarce goods.

• The variable under consideration is held constant.

• Several variables change simultaneously

• Everything else remains unchanged

Which statement is normative?

• A minimum wage is the correct government policy to increase the incomes of the lowest paid workers.

• A minimum wage is the lowest amount that employers can legally pay their workers.

• A maximum wage is the highest amount that employers can legally pay their workers.

• In Pakistan, a minimum wage of 15 000 Pakistani Rupees per month was set on 1 June 2016.

• Setting the minimum wage rate above the equilibrium will result in an excess supply of workers.

Which statement is a positive statement?

• Low inflation is preferable to low unemployment as a government aim.

• Low inflation will provide a more stable macro economy.

• The government must intervene in all markets to improve resource allocation.

• The government should cut income tax so living standards can improve.

• The government should not cut income tax so living standards can improve.

European airline opens a new route to Dubai. It purchases additional aeroplanes, rents additional landing slots, hires pilots and buys back some of its shares to raise the value of the firm on the stock market. What is an example of the factor of production capital?

• landing slots

• pilots

• shares

• aeroplanes

• Dubai

What is meant by the division of labour?

• Some workers work part-time and others work full-time.

• The different amount of output per hour is produced by each worker.

• The same amount of output per hour is produced by each worker.

• Workers divide their time between different jobs.

• Each worker specialises in a different task in production.

Which aspect of a planned economy might be viewed unfavourably by a consumer but favourably by a producer?

• a bureaucratic system of decision-making

• a long response time to changing economic events

• an emphasis on the production of capital goods

• an absence of incentives to work and to produce

• None of the above statements are correct

In a planned economy, what will determine the allocation of scarce resources?

• a mixture of private and central decision making

• the decisions of private entreprises

• the decisions of central government

• the forces of demand and supply

• the revenue generated from direct and indirect taxes