Question 1

Why is the issue of scarcity so central to economics?

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Question 2

Which of the following is the best definition of economics?

Accepted Answer

Economics is the study of how individuals and societies choose to use their scarce resources.

Question 3

The total demand for goods and services in an economy is known as:

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Aggregate demand refers to the total demand for goods and services within an economy at a given overall price level and in a given time period.

Question 4

How do economists define unemployment?

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Question 5

Correctly complete the following sentences from the options below.
(a) A drought in Australia will cause
(b) A new discovery of natural gas reserves will cause
(c) A change in demand, away from canola oil to olive oil, will cause

(i)	a shift outwards and to the right of the production possibility curve.
(ii)	a movement along the production possibility curve.
(iii)	a shift inwards and to the left of the production possibility curve.

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Question 6

What is opportunity cost?

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Question 7

Correctly complete the following sentences from the options below.
(a) Giving up work to study full- time:
(b) Working full- time and studying part time:
(c) Walking slowly instead of speedily to lectures:

(i)	the opportunity cost is the alternative use of time.
(ii)	the opportunity cost is wages.
(iii)	the opportunity cost is leisure time.

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Question 8

Why do economists use economic models?

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Question 9

What are demand- and supply- side policies?

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Question 10

Explain the two main divisions into which economic ideas fall.

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Question 11

If you were involved in deciding whether to allow mining at Kakadu National Park, identify the economic concept you have learned so far that you would use to help in your decision making, and give examples of what issues you would consider.

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Question 12

Which of the following is NOT a characteristic of a free- market economy?

Accepted Answer

In a free-market economy, the government does not typically intervene to equalize income distribution; this is more characteristic of a mixed or command economy.

Question 13

Which of the following is true of a completely free- market economy?

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In a completely free-market economy, production and consumption are determined by the forces of demand and supply without government intervention.

Question 14

What is economics all about?

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Question 15

Explain how a production possibility curve illustrates the concept of opportunity cost.

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Question 16

The factors of production used to produce goods and services are divided into three broad categories. Identify the three categories and explain what is included in each.

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Question 17

Economists define a recession as a period:

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A recession is commonly defined as a period when aggregate output, measured by GDP, declines for two consecutive quarters or more.

Question 18

Inflation and unemployment:

Accepted Answer

Inflation and unemployment are key topics in macroeconomics, which studies the economy as a whole, including overall economic growth, inflation, and unemployment rates.

Question 19

The branch of economics that examines the economic behaviour of aggregates such as income and employment is:

Accepted Answer

Macroeconomics is the branch of economics that studies the behavior of aggregates like national income, overall employment, and the overall level of prices.

Question 20

A study of how the changes in minimum wage rates in Australia will affect the rate of unemployment rate among unskilled workers is a___________ issue.

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Quiz 1: Economic Issues