Practice Topic 1

Zara has RM50 and can either buy a new book or go for a movie with her friends. She decides to buy the book. What is this economic decision an example of?

• Sunk cost

• Marginal cost

• Opportunity cost

• Variable cost

Economics studies how people allocate scarce resources to satisfy their:

• Scarce needs

• Unlimited wants

• Limited wants

• Measurable desires

Which of the following best describes microeconomics?

• The study of inflation and interest rates

• The analysis of a single consumer's purchasing decisions

• The evaluation of national productivity

• The measurement of unemployment trends

In the circular flow model, households provide ____ to the factor market and receive ____ from firms.

• Goods; services

• Labour; income

• Products; wages

• Capital; taxes

A country decides to shift its focus from producing consumer goods to building infrastructure. Which basic economic problem is being addressed?

• For whom to produce?

• What to produce?

• How much to produce?

• How to distribute?

The role of an entrepreneur in a business is to:

• Supply labour and capital to the government

• Supervise all employees and set salaries

• Combine production factors and take business risks

• Focus only on cost-cutting without innovation

Which situation will cause a rightward shift of the Production Possibility Curve (PPC)?

• A natural disaster reduces resource availability

• A technological innovation boosts production

• Population declines over time

• Increase in government restrictions

Given the following choices: Option X: 90 kg of wheat, 0 kg of rice Option Y: 82 kg of wheat, 1 kg of rice What is the opportunity cost of moving from X to Y?

• 7 kg of wheat

• 8 kg of wheat

• 10 kg of wheat

• 6 kg of wheat