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WorksheetsEconomics Yr 12 Introductory Quiz
Total questions: 9
Worksheet time: 5mins
The central purpose of economic activity is
to create maximum profit.
the satisfaction of needs and wants.
to achieve economic efficiency.
to save scarce resources.
In a free market economy, the economic problem of what goods should be produced is usually solved by
consumers expressing their tastes and preferences in their pattern of spending.
households completing business surveys to reveal their preferred products.
firms planning their activities to meet production targets set by government.
entrepreneurs producing their own goods to satisfy their own needs and wants.
The production possibility boundary below shows the possible combinations of fruit and wheat that a country could choose to produce. The country is producing OF fruit and OK wheat. If it decides to increase fruit production to OG, the opportunity cost in terms of wheat would be
OJ.
JK.
OF.
KL.
Features of the fundamental economic problem include
both unlimited resources and many wants.
both trade-offs and conflicting objectives.
the provision of goods with no opportunity cost.
both scarce resources and limited wants.
The existence of scarcity in an economy implies that
there are no free goods.
there are no public goods.
individuals must make choices.
there has been a misallocation of resources.
The fundamental economic problem facing all societies is
what, how and for whom goods and services should be produced.
the existence of unemployed resources.
a significant divergence between social and private costs of production and consumption.
inequalities in the distribution of income and wealth.
The table below shows the production possibilities for a firm producing butter and cheese. It can be concluded from the table that, as production of butter increases, the opportunity cost of such production, in terms of cheese
remains constant.
falls.
rises.
rises and then falls.
A free good
is paid for by the government.
has zero opportunity cost.
is non-excludable and non-rival.
has a perfectly inelastic supply.
A demand curve is drawn on the assumption that
quantity demanded always increases as price falls.
changes in price do not influence supply.
price elasticity of demand does not vary along the demand curve.
factors affecting demand, other than price, remain constant.
