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Economic 1 Ch 1

Total questions: 10

Worksheet time: 20mins

Name
Class
Date
1.

Which of the following best defines the basic economic problem faced by individuals, businesses, and governments?

a)

Socialism

b)

Islamic Economic System

c)

Mixed Economy

d)

Capitalism (Free Market)

2.

Economics is divided into two major branches. Which branch examines the economic behavior of aggregates such as national income, total employment, and rate of inflation? t

a)

Microeconomics

b)

Socioeconomics

c)

Macroeconomics

d)

Global Economics

3.

Which of the following is NOT one of the three basic economic questions that every society must answer?

a)

What and how much to produce?

b)

When to produce?

c)

How to produce?

d)

Who gets what is produced? (For whom?)

4.

"The value of the next best alternative that we give up when we make a choice." This definition refers to:

a)

Scarcity

b)

Opportunity Cost

c)

Production Cost

d)

Trade-off

5.

What does a Production Possibility Curve (PPC) represent?

a)

The total profit a company can make in a year.

b)

The relationship between inflation and unemployment.

c)

All combinations of goods and services that can be produced if all resources are used efficiently.

d)

The demand and supply of a specific product.

6.

In a Production Possibility Curve, what does the negative slope (movement from one point to another) imply?

a)

Economic growth. ducing the production of another

b)

Inefficiency in production.

c)

A trade-off, where increasing one product requires reducing the production of another.

d)

Unlimited resources.

7.

In which economic system are prices and production determined mainly by supply and demand with minimal government intervention?

a)

Socialism

b)

Islamic Economic System

c)

Mixed Economy

d)

Capitalism (Free Market)

8.

Which economic system is characterized by the government making all decisions regarding production, distribution, and setting prices?

a)

Capitalism

b)

Socialism

c)

Mixed Economy

d)

Islamic Economic System

9.

A "Mixed Economy" is best described as a system that:

a)

Relies solely on religious principles.

b)

Combines elements of both capitalism (private ownership) and central planning (government intervention). .

c)

Has no government regulations.

d)

Prohibits private ownership of property.

10.

Which of the following is a key characteristic of the Islamic Economic System according to the source?

a)

Prohibition of private property.

b)

Interest (Riba) is strictly prohibited and replaced with profit-sharing.

c)

Government aims to maximize tax revenue only.

d)

Separation of ethics from economic activities.