WorksheetsEfficiency (U2: T1)
Total questions: 40
Worksheet time: 21mins
Name
Class
Date
1.
Which of the following statements is true about the economic problem?
a)
The economic problem can be avoided
b)
The economic problem cannot be avoided
c)
The economic problem is irrelevant
d)
The economic problem is only a theoretical concept
2.
What is the primary objective of economic systems
a)
To maximise profits
b)
To minimize costs
c)
To achieve optimal satsifaction of wants
d)
To eliminate competition
3.
How should productive resources be allocated
a)
To their minimum use
b)
To their optimum use
c)
To their average use
d)
To their maximum use
4.
What will an efficient market achieve?
a)
Maximum profits
b)
Minimum costs
c)
Optimum results
d)
Elimination of competition
5.
Which of the following terms refers to the concept where additional units of input result in progressively smaller increases in output?
a)
Productive Efficiency
b)
Law of Diminishing Marginal Productivity
c)
Technical Efficiency
d)
Alloctive Efficiency
6.
What is the term for the efficiency achieved when resources are allocated in a way that maximizes the net benefit to society?
a)
Specialisation
b)
Dynamic Efficiency
c)
Allocative Efficiency
d)
Technical Efficiency
7.
Which type of efficiency is concerned with producing goods and services at the lowest possible cost?
a)
Productive Efficiency
b)
Economies of Scale
c)
Socially Optimal Level of Output
d)
Specialisation
8.
What is the term for the efficiency that focuses on the optimal production and distribution of goods and services over time?
a)
Technical Efficiency
b)
Dynamic Efficiency
c)
Allocative Efficiency
d)
Economies of Scale
9.
Which concept refers to the benefits gained by producing on a larger scale, where the cost per unit of output decreases as the scale of production increases?
a)
Specialisation
b)
Economies of Scale
c)
Productive Efficiency
d)
Socially Optimal Level of Output
10.
What does the Law of Diminishing Marginal Productivity state?
a)
Increasing the amount of any one resource will always result in an increase in production.
b)
Increasing the amount of any one resource will not necessarily result in an increase in production.
c)
Decreasing the amount of any one resource will always result in an increase in production.
d)
Decreasing the amount of any one resource will not necessarily result in an increase in production.
11.
What is productive efficiency?
a)
When resources are used in a way that achieves the maximum quantity of output from a given quantity of productive resources.
b)
When resources are used in a way that achieves the minimum quantity of output from a given quantity of productive resources.
c)
When resources are used in a way that achieves the average quantity of output from a given quantity of productive resources.
d)
When resources are used in a way that achieves no output from a given quantity of productive resources.
12.
What does it mean when resources are being used in efficient ways?
a)
Some resources are being wasted
b)
All resources are being wasted
c)
Nothing is being wasted
d)
Only a few resources are being wasted
13.
What is the definition of Marginal Cost
a)
The total cost of producing all units of output
b)
The addition to total costs that occur when one more unit of output is produced
c)
The average cost of producing one unit of output
d)
The fixed cost of production
14.
At what point does the Marginal Cost (MC) intersect with the Average Cost (AC)?
a)
At the highest point of the AC
b)
At the lowest point of the AC
c)
At the midpoint of the AC
d)
At the starting point of the AC
15.
When is a firm considered productively efficient?
a)
When AC is greater than MC
b)
When AC is less than MC
c)
When AC equals MC
d)
When AC is not related to MC
16.
What must a firm do to remain competitive in the market?
a)
Increase its prices
b)
Produce as its lowest average cost
c)
Reduce its workforce
d)
Expand it product line
17.
What happens if short-term demand increases and production goes beyond its most efficient level?
a)
The firm will continue to produce at the higher level
b)
The firm will reduce its prices
c)
Market Competition will force it back to its PPF
d)
The firm will expand its operations
18.
What is one of the results of an increase in the size of a firm's own operations?
a)
Increased average costs in the short term
b)
Elimination of wasted capacity found on small scale enterprise
c)
Decrease market share
d)
Reduced Efficiency
19.
What is one of the main ways a firm can increase productivity?
a)
Increasing the number of employees
b)
Increasing specialization of the factors of production
c)
Reducing working hours
d)
Increasing the number of products
20.
What is technical efficiency?
a)
The ability of a firm to obtain the maximum output from a given set of inputs without any waste.
b)
The ability of a firm to produce goods at the lowest possible cost.
c)
The ability of a firm to increase production of one good without decreasing production of another.
d)
The ability of a firm to produce goods with the highest quality.
21.
What does producing at a point on the production possibility frontier (PPF) imply?
a)
Increasing production of one good without affecting the production of another.
b)
Increasing production of one good would require a decrease in production of another good due to resource constraints.
c)
Producing goods with the highest quality.
d)
Producing goods with the least amount of resources.
22.
What is allocative efficiency?
a)
When resources go to the production of goods and services that people most want and provide greatest consumer satisfaction.
b)
When resources are equally distributed among all sectors.
c)
When the government controls the production of goods and services.
d)
When there is no production of goods and services.
23.
Allocative efficiency occurs when:
a)
Marginal benefit (utility) is greater than marginal cost.
b)
Marginal benefit (utility) is less than marginal cost.
c)
Marginal benefit (utility) equals marginal cost.
d)
Marginal benefit (utility) is not related to marginal cost.
24.
Which type of market operates in a way that delivers allocative efficiency?
a)
Monopolistic
b)
Oligopolistic
c)
Perfectly Competitive
d)
Monopsonistic
25.
What is consumer surplus?
a)
The difference between what a consumer is willing to pay and what they paid for a product.
b)
The difference between the market price and the lowest price a producer is willing to accept.
c)
The total amount a consumer pays for a product.
d)
The total amount a producer receives for a product.
26.
What is producer surplus?
a)
The difference between the market price and the lowest price a producer is willing to accept.
b)
The difference between what a consumer is willing to pay and what they paid for a product.
c)
The total amount a consumer pays for a product.
d)
The total amount a producer receives for a product.
27.
Which of the following is a type of market structure where many firms sell products that are similar but not identical?
a)
Perfect Competition
b)
Monopolistic
c)
Oligopoly
d)
Monopoly
28.
In which market structure do a few large firms dominate the market?
a)
Perfect Competition
b)
Monopolistic
c)
Oligopoly
d)
Duopoly
29.
Which market structure is characterized by a single seller?
a)
Perfect Competition
b)
Monopolistic
c)
Oligopoly
d)
Monopoly
30.
Which market structure is characterized by many firms selling identical products?
a)
Perfect Competition
b)
Monopolistic
c)
Oligopoly
d)
Monopoly
31.
What is a homogenous product in the context of perfect competition?
a)
A product that is unique and different from others in the market
b)
A product that is identical to all other products in the industry
c)
A product that is more expensive than others in the market
d)
A product that is only available in limited quantities
32.
What does it mean for producers to be price takers in a perfect competition market?
a)
They can set any price they want for their products
b)
They have no control over the price and must accept the prevailing market price
c)
They can influence the market price through advertising
d)
They can negotiate prices with buyers
33.
What is monopolistic competition?
a)
A market situation with a few buyers and sellers exchanging identical products
b)
A market situation with a large number of buyers and sellers exchanging similar but not identical products
c)
A market situation with a single seller dominating the market
d)
A market situation with a few sellers dominating the market
34.
What gives a firm market power in monopolistic competition?
a)
Lowering prices
b)
Marketing and product differentiation strategies
c)
Increasing production
d)
Reducing the number of competitors
35.
What is necessary for dynamic efficiency in monopolistic competition?
a)
Reducing Costs
b)
Increasing the number of sellers
c)
Innovating and advancing technology
d)
Lowering prices
36.
What is an oligopoly?
a)
A market situation in which a small number of firms are selling similar but not identical products
b)
A market situation in which a large number of firms are selling identical products
c)
A market situation in which a single firm dominates the market
d)
A market situation in which firms sell completely different products
37.
What is a characteristic behavior of firms in an oligopoly?
a)
They engage in costly competition
b)
They match the behavior of competitors
c)
They ignore competitors' actions
d)
They always lower prices to compete
38.
Why are monopolies rare in Australia?
a)
Due to high demand
b)
Due to Government Regulation and Competition Law
c)
Due to lack of innovation
d)
Due to high production costs
39.
What occurs at the level of monopoly/duopoly that incentivizes innovation and advancement in technology?
a)
Static Efficiency
b)
Dynamic Efficiency
c)
Productive Efficiency
d)
Alloctive Efficiency
40.
What is a significant barrier to entry for firms looking to enter an oligopoly market?
a)
Lack of skilled labour
b)
High start up capital required
c)
Limited market demand
d)
Strict government regulations
100 %
