What is an opportunity cost for a consumer spending money on a holiday?

A the potential interest earned if the holiday money had been saved

B the price paid for an air ticket to the holiday destination

C the rubbish created during the holiday which affects the local community

D the satisfaction that the consumer gains from the holiday

Helium is a gas that is limited in supply because it takes thousands of years to form. The US government holds 35% of the world’s supply of helium and has been selling its stocks. Helium is essential in medical scanners. It is also used for party balloons, which is a wasteful alternative use of a valuable good. Which two concepts apply to this statement?

A demand and supply, government subsidy

B excess demand, resource allocation

C opportunity cost, private monopoly

D public sector, factors of production

Which combination of characteristics describes a public good?

A excludable and non-rival in consumption

B excludable and rival in consumption

C non-excludable and non-rival in consumption

D non-excludable and rival in consumption

Which government policy will increase productivity?

A decreasing the number of training programmes

B encouraging labour-intensive production

C promoting good industrial relations

D reducing private sector investment

Which statement about the factors of production is correct?

A Capital is a financial resource and includes savings in banks.

B Enterprise is limited in supply and includes office workers.

C Labour is a human resource and includes pensioners and children.

D Land is a natural resource and includes trees and fish.

A builder spends one hour travelling to and from work. He works 40 hours per week for $200. He is given a choice to work 50 hours a week for an extra $75. What would be the opportunity cost to the builder of working the extra hours?

A the ability to increase his purchasing power

B the additional time travelling to and from work

C the increased hourly earnings of $7.50

D the ten hours of leisure time

What is an economist’s definition of a market?

A a collection of informal retail outlets run by small firms

B a place where traders gather regularly for short periods

C a system that enables individuals and firms to buy and sell goods

D the existence of consumer demand for a good

It is expected that consumers will use less paper money. What is the most likely reason for this?

A Inflation reduces the value of paper money.

B More ways of making payments will be available.

C Other forms of money are more durable.

D Paper money will have less intrinsic value.

What is an example of the purchase of a consumer good?

A A farm owner buys a television.

B A farm owner buys additional land.

C A farm owner buys fertiliser for their crops.

D A farm owner buys some farming equipment.

What is the function of the factors of production in an economy?

A to make goods and services to fulfil wants and needs

B to provide an even distribution of income

C to provide tax income for the government

D to reduce the existence of external costs

Which topic is included in microeconomics?

A economic growth

B elasticity of demand

C inflation

D the balance of payments

What may directly cause economic growth?

A higher imports

B higher levels of resources

C higher taxation

D higher unemployment

What causes economic agents to make choices?

A limited needs and wants

B the existence of finite resources

C the existence of free goods

D the market mechanism

What is an example of a macroeconomic aim?

A to create and maintain full employment

B to improve efficiency in the manufacturing sector of the economy

C to provide consumers with greater information when buying goods and services

D to encourage greater occupational mobility of labour