The Basics of Economics Quiz

[savio13]

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

Enterprise includes all natural resources.
Capital is produced by factors of production.
Laborers earn profit.
Land is always freely available.


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

Weather is part of the factor land.
Rainfall is a free resource.
Water is a scarce resource.
The effects of drought involve the government.


3. Which of the following is NOT a factor of production?

A $10 note
A shopkeeper
A farm
A printing machine


4. Commercial companies are reclaiming marshland to construct golf courses. What is the opportunity cost to society?

The expense of installing drainage.
The value of the land cleared.
The profits of the companies.
The natural habitat that is lost.


5. A charity sold tickets at $5 each. A ticket was picked and a prize of $100 was given to the owner of the ticket. A student bought a ticket but did not win. What is the opportunity cost to the student?

$5
What could have been bought with $100
$100
What could have been bought with $5


6. Which company operates in the primary sector?

Delta Gold: a rapidly expanding Australian gold and platinum mining company
Compass East Industries: a Thai ceiling fan manufacturer
Century City: Hong Kong holding company with property and hotel interests
First Bangkok City Bank: a medium-sized commercial Thai Bank


7. For anything to be used as money, it must be what?

readily acceptable
in fixed supply
fixed in value
legal tender


8. The prices of goods remain fixed in the shops of a planned economy, yet in the shops of a neighboring market economy they fluctuate widely. What is the most likely reason for the difference between the two economies is that, in the market economy?

producers are more efficient
there is higher unemployment
profits are lower
buyers and sellers determine prices


9. What is more likely to be found in a free market economy than in a planned economy?

an even distribution of income
an incentive to innovate
a wide range of public goods
a high unemployment rate


10. The table shows government expenditure as a percentage of Gross Domestic Product for four countries.
Country expenditure:

W 40%
X 36%
Y 50%
Z 33%

Which type of economy exists in these countries?

Planned
Subsistence
Pure market
Mixed