F4 Economics Test 1

Multiple choice

1. What is the basic economic problem?

A. Finite resources and limited wans.

B. Finite resources and unlimited wans.

C. Infinite resources and limited wants.

D. Infinite resources and unlimited wants.

2. Which statement best explains why drought is an economic problem?

A. Rainfall cannot be predicted easily.

B. The effects of drought require government action.

C. Droughts cannot be prevented.

D. Water is a scarce good.

3. New oil reserves are discovered. What has increased in supply?

A. Capital

B. Enterprise

C. Labour

D. Land

4. Which statement about the factors of production is correct?

A. Capital includes human-made machines that lose value over time to wear and advances in technology.

B. Enterprise is a natural factor of production that cannot be taught.

C. Labour is an immobile factor that does not change its skill level.

D. Land refers only to farmland that cannot be improved by human profit.

5. The following are four ways factors of production are used. What is likely to require the greatest use of
 the factor enterprise?

A. A carpenter making wooden articles in his leisure time for sale at a monthly market.

B. A corn farmer negotiating with other farmers to hire expensive machinery.

C. A food shop owner sometimes selling flowers in the shop.

D. A householder harvesting vegetables grown at home.

6. Hala makes cakes she bakes in her kitchen at home. She sells them at a local market. To produce more

cakes she decides to invest in a larger oven and to employ someone to help. Which factors of production

have changed?

A. Labour

B. Capital

C. Labour and capital

D. Enterprise and capital

7. A new dam is built in Turkey to provide hydroelectric power and a water supply. What is the opportunity

cost to the country of building the dam?

A. The cost to households and business of consuming the water supply.

B. The benefits foregone from other uses of the money used to pay for the dam.

C. The cost to consumers of using hydroelectric power.

D. The money used to pay for the construction and running of the dam.

8. A social club has sold raffle tickets at US $10 each. The owner of the winning ticket received a prize of US$250.

A student bought a ticket, but did not win. What is the opportunity cost to the student?

A. US $10

B. US $250

9. AC.firm cancould
What produce a number
have of possible
been bought combinations
with the US $10 of two goods. It can either produce 500 of good x

and
D. 300
Whatof could
good y, or 600
have beenx and 250with
bought y. What is the
the US opportunity cost of producing an extra 100 of good x?
$250
 A. 100 y

B. 250 y

C. 50 y

D. The extra wages paid to the workers

10. What is the main purpose of production?

A. To increase exports.

B. To provide employment.

C. To satisfy human wants.

D. To use factors of production.

11. Suppose primary production is not significant in County B. Which of the following may be a possible reason?

A. Country B lacks natural resources.

B. Country B is highly urbanized.

C. Country B is a small country.

D. Country B ’s population size is small.

Fill in the blanks

1. Economics is the study of the in the production of goods and services to achieve the of

economic wants.
2. Economics is also the study of the .

3. Economics /

4. examines specific economic units and or institutions.

5. looks at the economy as a whole or its major aggregate.

6. Scarcity means > .

7. Needs are the human .

8. In addition to basic needs, humans also have other . These are wants.

9. All countries have resources such as , , ,

, and .

10. By resources we mean all (land, forest, mineral and oil deposits), (labour and entrepreneur)

and (capital goods) resources that go into the production of goods and services.

11. All people have the same basic needs. No matter you are rich or poor, we all need ,

, , and to survive.

12. Wants are the to obtain and use various goods and services that provide utility that is

or .

13. Scarcity forces people to . There is also an of not doing one thing because another thing has

been chosen.

14. Just as and choice, so does the economy as a whole. The total amount of resources in an economy-

, , , -is limited.

15. opportunity cost = the goods or services that are forgone in order to obtain something else

16. Resources have alternative uses but human wants are unlimited. So there are not just enough goods

and services to satisfy everyone .

17. The scarcity gives rise to .

18. Decisions making on allocation of scarce resources involve and politics of a society.
19. Production = Production is the process of inputs （resources such as ） into outputs by firms in order to

earn profit. It is any activity made to satisfy people's needs and wants. It involves the

and of and services.

20. include televisions, cars, furniture and food.

21. include teaching, window cleaning, healthcare and retailing.

22. Factors of production = are the used to .

23. include all natural resources that are used in the production process.

24. is the physical and mental talents of individuals available and usable in producing goods and services.

25. includes all manufacturing aids used in producing consumer goods and services.

26. is an innovator is new products, new production techniques or organization.

27. Economy will have consumers（ ） and producers （ ）.

28. Income and expenditures will one other.

29. - extract raw material.

30. – manufacturing.

31. – providing services.

32. Primary means it is the , raw materials grown or dug out(extract) of the ground are

used to produce something else.

33. Secondary industries are firms who engage in the of raw materials grown or extracted

by primary industries.

34. Tertiary industry are firms any goods at all, but provide a service that support the

distribution of raw materials, parts of finished goods between organizations.

35. Service can be divided into and .

36. Businesses in each of the three sectors, primary, sector and tertiary are likely to be .

37. Business organizations generally value inputs and outputs in ; therefore the aim is to generate a

revenue which is greater than the costs, ie .

38. Commerce is the range of .

39. – the process of buying and selling to make profit.

41. In economics, a 'good', (or "goods', the plural) refers to .

42. Goods refer to anything that can satisfy human wants. In other words, a good is anything that some is always

44. Goods can be classified into two types, namely and .

45. Economic good is anything whose quantity is to satisfy all human wants is an economic good.

46. Some goods have a quantity all human wants.

47. The aim of organizations is to generate to generate outputs which have a greater value than the inputs used,

ie .

48. Commerce may be defined as and .

Definition

Needs -

Wants -

Opportunity cost -

Factors of production -

Trade –

Aids to trade -
Factors of production and features

Features of land :

Features of labour :

Features of capital :

Features of entrepreneur :

Questions
1 Wheat, water, yeast and other ingredients are mixed together to produce dough
2 Coal and oil are used to power electricity stations for use by firms and households
3 Farms plant seeds to grow wheat
4 Supermarkets and other shops sell bread to consumers
5 Road haulage service providers transport harvested wheat and finished breads
6 Consumers buy bread
7 Wheat is harvested
8 Insurance firms provide insurance to protect firms from risk of damage or theft
9 Dough is poured into baking pans and placed in ovens to cook
10 Sealed packets for the bread are produced and labelled in printing machines
11 Consumers make sandwiches or toast to consume
12 Finished loaves of bread are sealed in plastic packaging
13 Commercial banks provide loans and payment services to firms
14 Food inspectors check the quality and hygiene of the breads and the bakery