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WorksheetsEconomics Semester Exam
Total questions: 160
Worksheet time: 8hrs 0mins
Opportunity cost is the scarifies of
the lowest cost alternative
the next alternative
the best alternative
the next best alternative
The following are four ways factors of production are used.
What is likely to require the greatest use of the factor enterprise?
a carpenter making wooden articles in his leisure time for sale at a monthly market
a food shop owner sometimes selling flowers in the shop
a householder harvesting vegetables grown at home
a corn farmer negotiating with other farmers to hire expensive machinery
A person makes sandwiches at home for five hours each day. She makes 20 sandwiches per
hour, and she sells each sandwich for $2 each.
What is the opportunity cost if she takes a holiday on a working day?
$40
20 sandwiches
$2
100 sandwiches
To help reduce the price of oil, new supplies are needed. However, in 2013, objectors opposed
attempts to explore new sites because of the environmental damage the exploration might cause.
How does this illustrate the basic economic problem?
There are external costs involved in production.
The exploration involves demand and supply.
Oil is a limited resource.
Oil is expensive.
The diagram shows production possibility curves (PPC) for a country that can produce
agricultural products or manufactured products. Its current PPC passes through points Q and S but the country is currently experiencing
unemployment. If there is now full employment at the same time as new agricultural techniques enable an
increase in productivity, what would be the movement on the PPC diagram?
Q to R
P to R
P to S
S to R
New oil reserves are discovered.
What has increased in supply?
(a)
What is the basic economic problem?
Provide the keywords.
(a)
Why are wants not fully satisfied in an economy?
Governments cannot print enough money to pay for goods and services.
An economy can only produce a limited amount of goods and services.
Workers are too skilled for the requirements of the jobs available.
There is an over-production of goods and services by business organisations.
Which statement(s) is/are correct to described as public goods?
It is free and abundant
It is limited
Zero opportunity cost
It is essential for living things
What are the factors of productions?
(a)
Definition of basic economics problem.
Write the keyword(s).
Enter answer format: ____, ____
(a)
Who are the economics agents?
Enter answer format: ____, ____ and ____
(a)
What is the goods that involved opportunity cost?
(a)
Goods that not involving opportunity cost.
(a)
What are the questions to consider in order to make the choice and allocation of the resources?
Answer format: ___, ___ and ___
(a)
Define opportunity cost
Write the keyword(s)
Answer format: ___, ___
(a)
What is the full name of PPC?
(a)
What is needs in Economics?
Essential goods and services
For human to survive
Is not necessary to human's live
Fulfill human's desire
What is wants in Economics?
Essential goods and services
For human to survive
Is not necessary to human's live
Fulfill human's desire
What is the aim's of private sector?
to gain profit
to serve the public
to sell products
to sell services
What is the aim's of public sector?
to gain profit
to serve the public
to sell products
to sell services
What is good in Economics?
Is physical product/item produced by firms/government
Is non-physical product/item produced by firms/government
What is service in Economics?
Is physical product/item produced by firms/government
Is non-physical product/item produced by firms/government
What are the factors of productions?
Answer format: ___, ___, ___ and ___
(a)
What is the cause of labour mobility?
Answer format: ___, ___
(a)
The good is a normal good and incomes have increased
The good is a normal good and incomes have decreased
The good is an inferior good and incomes have increased
The good is an inferior good and incomes have decreased
Product A and B are substitutes. What will happen for product B if the price of product A increases?
Product A and B are substitutes. What will happen for product B if the price of product A decreases?
Product A and B are complements. What will happen for product B if the price of product A increases?
Product A and B are complements. What will happen for product B if the price of product A decreases?
Which diagram shows the effect of a successful advertising campaign?
Which diagram shows the effects of improvements in technology leading to greater productivity of capital?
Which diagram shows the effects of an increase in sales tax?
Which diagram shows the effects of a decrease in sales tax?
Which diagram shows the effects of poor weather conditions for crops?
Price decreases; quantity demanded decreases
Price decreases; quantity supplied increases
Price increases; quantity supplied decreases
Price increases; quantity demanded increases
Elastic demand; PED > 1
Inelastic demand; 0<PED<1
Perfectly inelastic demand; PED = 0
Perfectly elastic demand; PED = infinity
Which section of the demand curve is elastic?
Section A
Section B
Section C
Which section of the demand curve is unit elastic?
Section A
Section B
Section C
Which section of the demand curve is inelastic?
Section A
Section B
Section C
A good is being over produced
A good is being under produced
A good is being under consumed
A good is being over consumed
The effect of minimum wage on the labor market
The effect of rent control on the housing market
The effect of increasing a subsidy to farmers
A situation in which a country is able to produce a particular good or service at a lower cost (using fewer resources) relative to other countries
Absolute advantage
Relative advantage
Absolute gain
Relative gain
A situation in which an individual does not have enough income to satisfy their most basic needs of food, clean water, clothing, shelter, education and healthcare
Relative poverty
Absolute poverty
Aggregate poverty
Relational poverty
The proportion of people within a population who fall into certain age groups, e.g. young (0-14 years), of working age (15-65 years) and old (65 years and beyond)
Ageing population
Age spread
Age distribution
Age appreciation
The total demand for all goods and services in an economy from consumption (C), investment (I), government spending (G) and net exports (X-M)
(a)
The total supply of goods and services in an economy
(a)
The way resources are allocated to the production of the goods and services most wanted by consumers
Allocation of resources
Allocation of goods
Allocation of services
Allocation of production
A rise in the value of a currency due to market forces
(a)
Items of value, such as property and land
(a)
A situation in which government spending is cut and taxes are increased in a country, usually to meet debt repayment obligations
(a)
The cost of producing a unit (unit cost of production). It is calculated by dividing total cost by output or quantity
Average cost
Average unit
Average production
Average quantity
The fixed costs per unit
Average costs
Average fixed costs
Average units
Average revenue
The revenue per unit sold
Average unit
Average price
Average revenue
Average sale
The variable costs per unit
Average variable costs
Average fixed costs
Average costs
Average unit costs
What are the three questions faced by all economies?
What to produce, when to produce it and who receives it
What to produce, how to produce it and who receives it
Where to produce, how to produce and when to produce
Where to produce, when to produce and why to produce
What encourages firms to produce what consumers demand?
The chance to earn a high profit
The chance to experience high unit costs of production
The desire to attract new firms into the industry
The desire to keep revenue as low as possible
How are resources allocated in a market economy?
By directives
By the price mechanism
By directives or the price mechanism
By directives and the price mechanism
An economic system answers three questions about goods and services. Which of the following option is NOT one of these questions?
What to produce?
Who receives the products?
How to produce?
Where to produce?
In what type of economy allocation do individuals and firms determine what will be produced?
Government
Command
Market
Traditional
In economics there are 4 types of resources. Which of the following is NOT a type of resource?
Land
Money
Labor
Entrepreneurship
What makes a resource or good scarce?
Must be limited in quanity
Must be desirable
Must have more than one use
All of these answers.
What is the function of the price mechanism in a market economy?
allocating resources and guiding choices
allowing governments to provide price stability
enabling markets to operate fairly
preventing competitors from entering a market
Resource allocation deals with the ______________ of _____________ and the methods by which this is done.
giving, services
distribution, resources
allocation, expenses
None of the above
The factor of production that oversees resource allocation is _______________
Land
Enterprise
Labour
Capital
Another term for allocation is ______________.
Give away
Donate
Distribute
Throw away
Technologically advanced countries uses ______________.
Labor intensive technique of production
Capital intensive technique of production
What advantage do coins have that make them more suitable than banknotes to act as money?
They are more divisible
They are more durable
They are more portable
They are more recognizable
What does a commercial bank not provide?
Cash
Bonds
Loans
Mortgages
What is not a function of a central bank?
It is the lender of last resort to financial institutions
It is the sole issuer of notes and coins
It lends to individual firms and consumers
It manages the national debt for the government
A central bank acts as a lender of last resort especially in times of financial crisis.
What is the purpose of this function?
To cover credit card debits of consumers
To provide liquidity to the banking system
To remove failing banks from the financial system
To safeguard the profits of the banking system
The table shows how three people (X, Y and Z) spend their income.
For these three people, what is the most likely order of income, from lowest income to highest income?
Y --> X --> Z
Y --> Z --> X
Z --> X --> Y
Z --> Y --> X
What is the most important factor that affects how much a family saves?
The income of the family
The level of taxation
The rate of inflation
The reliability of banks
The table shows some information for a computer engineer in 2015. Income tax is fixed at 20%. The engineer saved 10% of the disposable income. How much was saved?
$3200
$4000
$4400
$5500
What is least likely to lead to an increase in consumer spending on a new car?
A decrease in the cost of car repairs
A decrease in the price of petrol
A decrease in the rate of interest
A decrease in train fairs
What will cause the level of savings in an economy to rise?
A fall in investment
A fall in real wages
A rise in income taxes
A rise in interest rates
What is most likely to encourage the immediate purchase of an expensive item such as a new car?
Anticipating a fall in the rate of inflation
Expecting interest rates to fall
Making it easier to obtain a loan
Needing to plan for unexpected emergencies
Why does specialization increase the productivity of workers?
Average cost of production increases
Staff turnover is high
Time is saved by not moving between tasks
Workers lose interest in their job
What could discourage women from seeking employment?
More education and training are provided
More flexible and part-time jobs are available
There are fewer promotion opportunities for women
There is a shift in employment to the services sector
Which activity takes place in the tertiary sector?
Assembling computers
Giving legal advice
Harvesting grain
Making bread
Carlos has been offered a new job with a large multinational company. He is undecided whether to accept the position.
What is a non-wage factor he might consider?
Bonus payments
Holiday entitlement
Overtime rate
Salary level
The table shows the change in real incomes for a number of occupations between 1985 and 2015.
What can be concluded from the table?
All workers were better off in 2015 than in 1985
Fork-lift truck drivers earned the lowest wages in 2015
Doctors have earned more than lawyers since 1985
Professionals receive higher percentage increases in income than manual workers
What is a characteristic of tertiary industries?
They are located away from centers of population
They do not sell to the final consumer
They tend to be labor-intensive
They transform raw materials into goods
What is likely to lead to an increase in the wages of university lecturers?
An increase in the fringe benefits provided to university lecturers
An increase in the tuition fees paid by university students
Government policies reducing the length of the training for university lecturers
Increased demand from students to study at university
What could affect the size of the labor force in an economy?
The existence of a trade union
The government’s immigration policy
The quality of university graduates
The ratio of male to female employees
When is a trade union likely to have more power to increase its members’ wages?
When imports are increasing
When labor supply is increasing
When output is increasing
When unemployment is increasing
What is most likely to help a trade union’s claim for wage increases in an industry?
A decrease in the price of a close substitute for the product
A decrease in the qualifications needed for the job
An increase in the number of workers
An increase in the profits of the industry
What is the most likely reason a firm might welcome the introduction of a trade union for its workers?
Unions advise on the level of company dividends
Unions press for higher minimum wage rates
Unions simplify the process of wage bargaining
Unions wish to operate labor-intensive production methods
What will make it harder for a trade union to increase the wage rate for its members, without reducing employment?
A switch from short-term to long-term fixed contracts of employment
An increase in the number of substitutes for the product
Growth in an economy and increased demand for labor
Lower price elasticity of demand for the product
What is the definition of diseconomies of scale?
The decrease in average revenue as output increases
The decrease in fixed costs as output increases
The increase in average total costs as output increases
The increase in total costs as output increases
What is an example of a technical economy of scale?
Banks provide loans at a lower interest rate to bigger firms
Bigger firms hire more workers
Firms obtain discounts when buying in bulk
Machines are used closer to their full capacity
A large baker buys a flour mill.
Which form of integration is this?
Conglomerate
Horizontal
Vertical backwards
Vertical forwards
What is a possible cause of diseconomies of scale?
An increase in extra administration
An increase in raw materials costs
An increase in taxation on company profits
An increase in the national minimum wage
A company with a chain of restaurants bought another chain of restaurants.
How is this purchase most likely to be classified?
Conglomerate merger
Diversification
Horizontal integration
Vertical integration
A company’s annual report suggested that it had benefited from some changes.
Which change is an internal economy of scale for this company?
An improvement in road and rail facilities that has reduced its distribution costs
An increase in the number of local specialist workers that it could recruit
The introduction of new training at a local college for which staff have enrolled
The reduction in the company’s costs by the purchase of a factory supplying components
Which form of production would be least likely to have the advantages of economies of scale?
Car manufacturing
Commercial cereal farming
Handmade jewelry
Refining of oil products
To achieve horizontal integration, a firm producing tires could merge with another firm producing
Motor cars
Rubber
Tire-producing machinery
Tires
The high value of goods sold by large supermarkets enables them to reduce prices, but the most important advantage that these businesses have is that they can sell non-food items as well as food.
Which economic results does the statement suggest are available to large supermarkets?
Economies of scale and diversification
External benefits and specialization
Horizontal integration and optimum output
Increased sales and diminishing returns
Why is the energy supply industry dominated by very large firms in many economies?
Government controls prevent the exploitation of consumers
High fixed capital costs exist
Labor-intensive production techniques are used
Non-price advertising increases competition
What is the main difference between capital-intensive production and labor-intensive production?
The market structure of the production process
The output that the production process creates
The resources on which the production relies
The size of the firm that uses the production process
What change will make a manufacturing company replace labor with capital to maintain the most efficient combination of factors of production?
The price of machinery has increased
The productivity of labor has increased
The productivity of machinery has increased
The supply of labor has increased
When will a firm maximize its profits?
When it excludes a rival supplier from the market
When it produces where average cost and average revenue are equal
When it sells as many products in as many different markets as it can
When the difference between total cost and total revenue is greatest
The table shows the costs of a firm.
What is the value of the firm’s fixed costs?
$20
$30
$60
$80
The diagram shows the fixed costs, variable costs and total costs of a firm.
Which distance represents the firm’s fixed costs?
WX
WY
XY
XZ
An entrepreneur buys a workshop for $200,000 to make plastic boxes. In the first year of operation he spends $70,000 on materials, employs ten production workers paid by the amount produced (piece rate) at a total cost of $80,000 and buys two delivery vehicles for $10,000 each.
What are his total variable costs?
$100,000
$150,000
$220,000
$370,000
The table shows some of the costs of running a retail shop in one week.
What are the total fixed costs during this week?
$200
$240
$700
$750
Which cost would be considered variable by a bus company?
A new bus
Diesel fuel
Loan repayment
Rent
A firm that sells its product for $6 a unit has the following total costs.
Which statement is correct?
Average cost is lowest when 10 units are produced
The firm does not make any profit when 20 units are sold
The firm has no fixed costs
Total variable costs fall continuously over these outputs
Which statement about fixed costs is correct?
They exist only in the long run
They include raw material and direct labor costs
They increase at the same rate as output
They must by paid even if there is no output
What is a characteristic of perfect competition?
Firms sell an identical product
New firms cannot enter the market
The market is controlled by one firm
There is a high degree of market concentration
Which statement explains why firms in perfect competition are not able to exploit consumers?
The firms can restrict output
The products are differentiated
There are barriers to entry
There is perfect information
Which characteristic can exist both in monopoly and in perfect competition?
Freedom of entry
Many buyers
Many sellers
Perfectly elastic demand curve
What is a characteristic of a perfectly competitive firm?
Absence of competitors
Non-price competition
One dominant firm
Price taker
Which international market is closest to the model of perfect competition?
Diamonds
Foreign currency
Petrol (fuel)
Washing machines
A monopoly takes over an industry from competitive firms.
What is not likely to be true about a monopoly compared with a competitive firm?
A monopoly will earn a higher rate of profit
A monopoly will gain a greater share of the market
A monopoly will offer a wider choice to the consumer
A monopoly will operate on a larger scale of production
Which is not a function of money?
durability
measure of value
medium of exchange
store of value
Which is not a problem of bartering as a medium of exchange?
the need for a double coincidence of wants
the need for divisibility
the need for portability
the need for trade and exchange
Which is not a function of a central bank?
the facilitation of company growth
the government's bank
the lender of last resort
the sole issuer of bank notes and coins in the country
Which is a secondary function of commercial banks?
accepting deposits
credit creation
making advances
offering internet banking
Which are not functions of a commercial bank?
cheque clearance and foreign exchange dealings
internet banking and money transfer facilities
lender of the last resort and bankers' bank
loans and credit creation
What is the main source of income for most people?
dividends
interest
profit
wages and salaries
Which term describes income earned by an individual after income tax and other changes have been deducted?
disposable income
gross income
nominal income
real income
Money intended for spending on goods and services within the next twelve months is known as
capital
capital expenditure
current expenditure
savings
Which type of consumption occurs when people buy goods and services that they feel increase their social status or image?
capital consumption
conspicuous consumption
current consumption
household consumption
Which is the least likely determinant of the level of spending, saving and borrowing in an economy?
consumer confidence levels
inflation rates
interest rates
trade policies
Some professional footballers earn over $1.5 million per week. What is the most likely reason for this?
Being a footballer is a seasonal job
Some professional footballers have unique of skills and talent
The job is high-risk so needs to be highly compensated
The working life of a professional footballer is relatively short
In 2017, new graduates in the UK could earn an annual salary of approximately ￡29000 working in the public sector and ￡42500 working in the legal profession. Identify the most likely reason why a graduate may choose to work in the public sector rather than the private sector of an economy?
better promotion prospects and career progression
greater job security and pension
higher earning potential
more opportunities to earn bonuses
Following an increase in the national minimum wage (NMW), which is most likely to reduce government expenditure on welfare payments?
greater productivity of public sector workers
increased consumer spending in the economy
increased tax revenues from higher income tax
unemployed workers having a greater incentive to work
Women, in general earn less than men. Which is a possible reason for this?
A larger number of women work part-time or work flexible working hours
More women are enrolled on medicine and law courses
More women are focused on their careers and delaying having children
There is a greater female participation in the workforce
A disadvantage of specialisation of labour for a firm is that
the production process may become dependent upon particular worker
the quality of the products increases
workers become skilled in the job and more productive
workers make fewer mistakes
A request by a trade union for a pay rise for its members who work in a toy factory is likely to be successful if
the productivity of workers in the toy factory has fallen
there is a large pool of people willing to work in the toy factory
there is high demand for toys produced in the factory
there is low inflation in the economy
Which is a reason why a trade union may ask for a wage increase for its members?
A higher rate of inflation
higher unemployment in the economy
lower productivity in the industry
lower profits in the industry
Which is an example of action taken by a trade union?
go-fast
lie-in
sit-down
work-to-rule
The main aim of a trade union is to
call its members out on strike action
cause disruptions to employers and the economy
gain publicity for its members
improve pay and working conditions for its members
A group of workers in a Bangladesh garment factory is concerned about the low pay, poor working conditions and extended hours of work. They decide to work only for their contracted hours of work and put a ban on overtime. This type of industrial action is known as
go-slow
sit-in
strike action
work-to-rule
What is meant by financial economies of scale?
Lower average costs experienced by large banks and other financial institutions
Lower average costs arising from a large firm operating its finance department more efficiently
Lower average costs due to the ability of large firms to borrow more cheaply
Lower average costs occurring because of the use of larger capital equipment
