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WorksheetsIG MCQ PRACTICE 2
Total questions: 30
Worksheet time: 2hrs 30mins
Which of the following is not considered a factor of production?
a farm
a farmer
a farmer's bank account
a second-hand tractor
What may be considered an opportunity cost of repairing flood damage in a country?
reallocating government funds from other projects
providing shelter for the homeless
a decline in the tourist industry
loss of profits from affected businesses
In the context of a recession that decreases production in both cars and furniture, which movement on the diagram represents this change?
X to W
X to Y
Z to W
Z to Y
In response to a price increase from $5 per kilo to $6 per kilo, a chicken farmer raises supply from 400 kilos to 500 kilos per week. What is the price elasticity of supply?
0.8
0.9
1.2
1.25
What could cause the movement from point X to point Y on the demand curve for chocolate in the diagram provided?
A change in tastes
A fall in the price of chocolate
An increase in income
A successful advertising campaign for chocolate
If both a bee-keeper's bees pollinate neighbors' fruit trees and sting gardeners, how will costs and benefits be affected?
External benefits will fall and social costs will fall.
External costs will rise and social benefits will fall.
Social costs and social benefits will fall.
Social costs and social benefits will rise.
Which of the following would not have been a cause of the significant fall in the world price of petrol (gasoline) in 2015?
The continuing global recovery from the world economic recession
The increasing exploitation of US oil reserves
The re-entry of Iranian producers to the world oil market
The shorter journeys from using the new Suez Canal
Which statement about financial matters is correct?
Commercial banks’ main activity is the finance of international trade.
Paper banknotes possess all the desirable properties needed to act as money.
Stock exchanges trade mainly in second-hand stocks and shares.
The central bank acts as the lender of last resort to companies facing bankruptcy.
What is most likely to be used to support a claim for wage increases in an industry?
a decrease in the industry's sales
a decrease in the need for specialist training
an increase in cheap imports of a rival product
an increase in wages in a similar industry
The government increases the rate of income tax and decreases the rate of a sales tax (VAT). From the initial equilibrium point of X, which letter indicates the new equilibrium point in a market for normal goods?
A
B
C
D
In South Africa, the number of skilled workers is relatively low. However, average wages in South Africa are double the average wage in Brazil and Turkey and they are 1.6 times higher than in Malaysia. What may be concluded from this information?
Malaysian workers are more skilled than South African workers.
Prices in South Africa are double those in Brazil.
South Africa's labour productivity is low.
South African trade union bargaining power is strong.
To achieve horizontal integration, a firm producing tyres could merge with another firm producing:
motor cars
rubber
tyre-producing machinery
tyres
Which costs will necessarily fall continuously as output increases?
average fixed costs
average variable costs
opportunity costs
repayment costs of borrowing
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.
A
B
C
D
When is a tax considered progressive?
When some goods have a higher tax than others
When the rate of tax increases as income increases
When the tax is linked to the rate of inflation
When the tax is on incomes rather than on goods or services
Which policy would most likely help a government make the distribution of income more equal?
Reducing housing subsidies
Reducing indirect tax on food
Reducing inheritance tax
Reducing tax on the dividends on stocks and shares
What is a potential conflict a government might face when trying to achieve one of its aims?
Achieving a more even distribution of income may prevent a rise in the average standard of living.
Achieving an increase in economic growth may prevent full employment.
Achieving full employment may prevent stable prices.
Achieving stable prices may prevent a current account surplus on the balance of payments.
Which policy combination would be most effective for increasing employment levels?
Decrease general taxation and decrease the rate of interest
Decrease general taxation and increase the rate of interest
Increase general taxation and decrease the rate of interest
Increase general taxation and increase the rate of interest
A newspaper reported that a country’s economy had grown by 3% during the last year. What must have increased in that year?
costs of production
gross domestic product
unemployment
wage levels
What is meant by deflation?
a fall in the general price level
a fall in the international value of a currency
a fall in the rate of inflation
a fall in the real value of money
What was the budget balance of the government in that year?
$926 million in deficit
$4806 million in deficit
$926 million in surplus
$4806 million in surplus
What is the change in GDP per head, after taking account of price increases (real change), between 2000 and 2013?
A
B
C
D
Which statement about the poorest families in developing economies is not likely to be correct?
A) The children will be expected to work to help provide income.
B) The family will find it easy to obtain loans to develop their farms.
C) The family will have a low earning capacity.
D) The family will suffer from malnutrition and lack of medical care.
Assuming no migration, which situation must exist if the population is to change in the manner shown in the diagram?
A) birth rate falling and death rate falling
B) birth rate greater than death rate
C) death rate greater than birth rate
D) death rate rising and birth rate falling
Which country is likely to be least developed based on the given data?
A) Country with 20% labor force in service industries, life expectancy 49 years, GDP per head $380
B) Country with 35% labor force in service industries, life expectancy 49 years, GDP per head $350
C) Country with 40% labor force in service industries, life expectancy 53 years, GDP per head $350
D) Country with 45% labor force in service industries, life expectancy 63 years, GDP per head $450
Which government policy is most likely to increase the volume of exports?
devaluation
embargoes
quotas
tariffs
What might encourage international specialisation between countries?
free trade
inefficiencies in production
labour immobility
tariffs
In 2015, Russia banned the imports of food, such as milk, from the European Union (EU). Which outcomes are most likely to happen as a result?
excess demand in Europe, price of milk in Russia falls, profits of EU farmers rise
excess demand in Europe, price of milk in Russia rises, profits of EU farmers rise
excess supply in Europe, price of milk in Russia falls, profits of EU farmers fall
excess supply in Europe, price of milk in Russia rises, profits of EU farmers fall
In 2010, Vietnam experienced a deficit in the value of its trade in goods (visible) despite exporting a greater number of goods than it imported. What could explain this?
The average price of its goods imported exceeded the average price of its goods exported.
The average value of its goods exported exceeded the average value of its goods imported.
The country had a deficit on its trade in services.
The country's government imposed tariffs on imports.
