IGCSE Basic Economic Problem

The term "economies of scale" refers to ...

• the average costs of production decreasing as a firm expands

• the average costs of production rising as a firm expands

• the average costs of production remaining the same as a firm expands

• the average costs of production at first decreasing, then increasing, as a firm expands

What are the 4 factors that lead to a country’s economic growth?

• investment in human capital, investment in physical capital, land (natural resources), entrepreneurship

• good international relations, a democratic president, strict laws, freedom of press

• a powerful military, strong dictatorial leadership, communist regime, little personal freedom

• a monarchy, the World Bank, a parliamentary democracy, personal freedom

Which are three basic economic questions addressed by an economy?

• For whom should production take place?

• When should production take place?

• What production should take place?

• How should production take place?

Which term is used to describe non-physical items, such as haircuts, bus journeys and internet access?

• Factors of production

• Goods

• Services

• Opportunity cost

Production of any good or service requires resources known as ...

• Factors of production

• land

• production facitilies

• raw materials

Yann bought a new bicycle for $350 but has never used it. The second-hand value of the bicycle is $250. What is the opportunity cost to Yann of keeping the bicycle?

• 0

• 100

• 250

• 350

Which statement best describes Opportunity Cost

• The next best alternative chosen

• The next best alternative forgone

• The best alternative chosen

• The worst alternative forgone

What is the basic economic problem?

• Scarcity of resources

• Abundance of resources

• Equal distribution of wealth

• Unlimited wants

Which of the following is a factor of production?

• Money

• Labor

• Technology

• Government

What does opportunity cost refer to in economics?

• The cost of an opportunity

• The benefit of the next best alternative forgone

• The total cost of all alternatives

• The cost of the chosen alternative