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- 1. Multiple Choice
What can a central bank increase in order to reduce consumer borrowing?
commercial bank deposits
government spending
the exchange rate
the rate of interest
- 2. Multiple Choice
To help reduce the price of oil, new supplies are needed. However, objectors opposed exploration of new sites because of the environmental damage it may cause. Why is this statement an example of the basic economic problem?
Oil is a limited resource.
Oil is expensive.
The exploration involves demand and supply.
There are external costs involved in production.
- 3. Multiple Choice
What is an advantage of labor-intensive production?
each item can be individually made
keeps unemployment up
workers don't have pride in the product
workers have to work hard
- 4. Multiple Choice
What is an advantage of capital-intensive production?
average costs of production are low
fixed costs are high
machinery may break down
there is no ready market for the product
- 5. Multiple Choice
Which of the following is a characteristic of money?
acceptability
cash
store of value
medium of exchange
- 6. Multiple Choice
Which of the following is not a function of money?
medium of exchange
durability
store of value
standard of deferred payments
- 7. Multiple Choice
The diagram shows total cost (TC), total fixed cost (TFC) and total variable cost (TVC). Which costs are shown by W, X and Y?
W: TC
X: TFC
Y: TVC
W: TC
X: TVC
Y: TFC
W: TFC
X: TC
Y: TVC
W: TVC
X: TFC
Y: TC
- 8. Multiple Choice
Which government policy measure might likely lead to an increase in a country’s supply of labor?
increasing unemployment benefits
raising the age of retirement
lowering interest rates
raising income tax
- 9. Multiple Choice
Which of the following describes a monopoly market structure?
There is easy entry into the market.
A monopolist’s product has many substitutes.
There are no external costs.
A monopolist may determine the price of its product.
- 10. Multiple Choice
Which of the following is not a characteristic of a perfectly competitive market?
no company holds a substantial market share
there is high restrictions to entering an industry
there are multiple products produced
there is competition among firms
- 11. Multiple Choice
A clothing manufacturer expands by taking over a clothing retailer. Which type of merger is this?
backward vertical
conglomerate
horizontal
forward vertical
- 12. Multiple Choice
Many low-income countries rely on multinational companies (MNCs) to provide economic development. What is a disadvantage of this for the low-income country?
New production techniques are introduced.
The MNCs have to pay taxes on their profits.
Local firms close because MNCs are more efficient.
The balance of payments may improve.
- 13. Multiple Choice
Social cost is calculated by adding Private cost and External cost. What is the external cost of a factory which has 7.8 social cost and a 4.3 private cost?
3.5
12.1
4.4
10.12
- 14. Multiple Choice
Which of the following explains why traffic congestion reduces labor productivity? Select all that apply.
workers' health at risk due to pollution
workers arriving tired
workers arriving stressed for being late
late workers means less products made
- 15. Multiple Choice
What does it mean when a worker is geographically mobile?
the worker can easily transfer from one place of work to another
the worker can easily shift from one job to another
the worker finds it hard to transfer from one place of work to another
the worker finds it hard to shift from one job to another
- 16. Multiple Choice
What does it mean when a worker is occupationally mobile?
the worker finds it hard to transfer from one place of work to another
the worker can easily shift from one job to another
the worker can easily transfer from one place of work to another
the worker finds it hard to shift from one job to another
- 17. Multiple Choice
How will a rise in the price of car parking
affect the market for cars?
It will increase the demand for cars which increases the price and the quantity supplied
It will decrease the supply of cars which increases the price and lowers the quantity demanded
It will decrease the demand for cars which lowers the price and the quantity supplied
It will increase the supply of cars which decreases the price and increases the quantity demanded
- 18. Multiple Choice
Which of the following information will likely increase the number of enterprise (businesses) in a certain country? Select all that apply.
higher incomes in that country
higher consumer spending in that country
well-educated population
growing population
- 19. Multiple Choice
How will building more roads in the capital of a country benefit that country? Select all that apply.
reduced traffic congestions
helps with tourism
reduced cost of production
more products are created
- 20. Multiple Choice
Which of the following shows the relationship between consumer spending and imports?
the higher the consumer spending, the higher the imports
the lower the consumer spending, the higher the imports
the higher the consumer spending, the lower the imports
there are completely unrelated
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