Author: stuart001uk2014

What is the basic economic problem facing all societies?

Select ONE answer:

1. a divergence between social costs and private costs
2. unequal distribution of income
3. unemployment of resources
4. unlimited wants and scarce resources

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

1. This is a problem in terms of allocation of resources but it is not the basic economic problem
2. This may be a government priority but it is not the basic economic problem.
3. This may be a policy issue for the government but it is not the basic economic problem.
4. Correct: This explains why the basic economic problem of scarcity occurs.

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Which of the following is an example of government failure?

Select ONE answer:

1. an increase in obesity caused by overconsumption of sugar
2. a subsidy on sun cream which reduces the incidence of skin cancer
3. government health warnings on cigarette packets which deter people from smoking
4. government imposed rent controls which reduce the amount of rented accommodation available to the poor

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

1. The is an example of market failure.
2. Harmful effects (and negative externalities) of exposure to the sun are reduced.
3. This is an example of successful provision of information to reduce overconsumption of a demerit good.
4. Correct: This will make it more difficult for poor people to rent accommodation.

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Which statement about total revenue is correct?

Select ONE answer:

1. It is always equal to total cost.
2. It is always equivalent to profit.
3. It is maximised when the price elasticity of demand is inelastic.
4. It is price multiplied by the quantity sold.

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

1. Costs and revenue are determined separately. Costs may be less than, equal to or greater than revenue.
2. Total revenue is not the equivalent of profit
3. Total revenue is maximised when price elasticity of demand = -1
4. Correct: Total revenue of a firm = the price of each unit times the number of units sold.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which of the following is an example of capital as a factor of production?

Select ONE answer:

1. the airspace above an airport used by airlines
2. cars used by a taxi firm in a city
3. money used to set up a steel producing firm
4. shares sold by an expanding insurance firm

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

1. This is an example of land.
2. Correct: cars are a human-made good used to produce a service.
3. This is not a factor of production.
4. This is also not a factor of production.

This work is licensed under a Creative Commons Attribution 4.0 International License.