Question 1

Which of the following is a positive statement in economics?&#10;A) The income in the UK needs to be distributed more fairly.&#10;B) The government needs to put more emphasis on improving UK export levels.&#10;C) An increase in demand will increase the equilibrium price.&#10;D) Faster economic growth is more important than a better quality of goods.

Accepted Answer

Positive statements are based on factual claims about how the world actually works, rather than how it should work. Option C, "An increase in demand will increase the equilibrium price," is a positive statement because it describes a factual relationship in economics without making a judgment.

Question 2

Which of the following is a normative statement in economics?&#10;A) A higher price reduces the quantity demanded.&#10;B) A higher price reduces the quantity supplied.&#10;C) The government should spend more on healthcare.&#10;D) Increased spending by the government can increase the price level.

Accepted Answer

Normative statements are subjective and express opinions or values, suggesting how things should be. Choice C, "The government should spend more on healthcare," is a normative statement because it reflects a value judgment about what ought to happen, rather than an objective observation or prediction about economic mechanisms.

Question 3

Scarcity and choice occur because of:&#10;A) Unlimited resources and limited human wants.&#10;B) Limited resources and unlimited human wants.&#10;C) Unlimited resources and unlimited human wants.&#10;D) Limited resources and limited human wants.

Accepted Answer

Scarcity and choice arise due to the fundamental economic problem of having limited resources (such as time, money, and raw materials) to meet unlimited human wants and needs. This discrepancy necessitates making choices about how to allocate resources efficiently.

Question 4

Resources in an economy do not include:&#10;A) Demand&#10;B) Capital&#10;C) Labour&#10;D) Land

Accepted Answer

Resources in an economy are factors of production that include capital, labor, and land. Demand, however, is not a resource but rather a measure of consumer desire for goods and services.

Question 5

A mixed economy:&#10;A) Has no supply.&#10;B) Has no demand.&#10;C) Is run by the government.&#10;D) Has a private and a public sector.

Accepted Answer

A mixed economy features both private and public sectors, allowing for a blend of free market and government intervention.

Question 6

Which of the following is in the public sector in the UK?&#10;A) Tesco plc.&#10;B) A sole trader&#10;C) The BBC&#10;D) BP plc

Accepted Answer

The BBC (British Broadcasting Corporation) is a public sector organization in the UK, funded by the government through the television licence fee.

Question 7

Organizations in the public sector:&#10;A) Are owned by investors.&#10;B) Are likely to be driven by the profit motive.&#10;C) Are more likely to have social objectives.&#10;D) Report to shareholders.

Accepted Answer

Organizations in the public sector are typically focused on providing services to the public and are more likely to have social objectives rather than being driven by profit motives, unlike private sector organizations that are owned by investors and report to shareholders.

Question 8

Capital goods:&#10;A) Are for immediate consumption.&#10;B) Are usually bought by households.&#10;C) Are bought by firms for production.&#10;D) Help to raise the standard of living in the short run.

Accepted Answer

Capital goods are bought by firms for production purposes, as they are used in the production of other goods or services rather than being intended for immediate consumption.

Question 9

Which of the following is an example of microeconomics?&#10;A) The causes of UK unemployment.&#10;B) The consequences of faster economic growth.&#10;C) The causes of a UK trade deficit.&#10;D) The price of houses in Oxford.

Accepted Answer

Microeconomics focuses on individual markets and the decisions of consumers and businesses, such as the pricing of houses in a specific area like Oxford.

Question 10

&#34;We need to redistribute income to make it &#34;fairer&#34; is an example of a:&#10;A) Positive economic statement.&#10;B) Normative economic statement.&#10;C) Keynesian economic statement.&#10;D) Mixed economic statement.

Accepted Answer

Normative economic statements are value judgments or opinions that cannot be tested or proved right or wrong. The statement "We need to redistribute income to make it 'fairer'" reflects a value judgment about what should be done, making it a normative statement.

Question 11

Which of the following is not an opportunity cost of attending university?&#10;A) The income foregone from full-time employment&#10;B) The cost of meals&#10;C) The tuition fee paid&#10;D) The cost of textbooks and equipment for your course

Accepted Answer

The answer of Which of the following is not an...

Question 12

Three questions we need to ask are:&#10;A) What is to be produced, who is going to produce, and when are we going to produce.&#10;B) What is to be produced, how to produce, and for whom to produce.&#10;C) How to produce, when to produce, and for whom to produce.&#10;D) Who is going to produce, when to produce, and for whom to produce.

Accepted Answer

The answer of Three questions we need to ask are:&#10;A)...

Question 13

An example of a planned economy would be:&#10;A) United States&#10;B) Japan&#10;C) United Kingdom&#10;D) Cuba

Accepted Answer

The answer of An example of a planned economy would...

Question 14

In the free market, decisions are made by:&#10;A) The government&#10;B) Private firms only&#10;C) Individuals and private firms&#10;D) Individuals only

Accepted Answer

The answer of In the free market, decisions are made...

Question 15

Which of the following is not an advantage of the free market?&#10;A) Greater efficiency&#10;B) Increased profits&#10;C) Greater consumer choice&#10;D) More bureaucracy

Accepted Answer

The answer of Which of the following is not an...

Deck 1: What Is Economics