Category: Economics

In a world economy there are two goods, guns and butter, and two countries, X and Y. Country X can produce both guns and butter with fewer resources per unit than country Y, but country X has a higher opportunity cost in the production of guns than country Y.

Which statement is correct?

Select ONE answer:

1. X has an absolute advantage in butter but NOT in guns.
2. X has an absolute advantage in guns but NOT in butter.
3. X has a comparative advantage in butter.
4. X has a comparative advantage in guns.

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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

Which of the following is the best example of a public good?

Select ONE answer:

1. education
2. medical care
3. postal services
4. radio broadcasts

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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

What would not be included in a cost-benefit analysis of a proposed new university?

Select ONE answer:

1. the costs of building the new university
2. the extra income earned by the new university’s graduates
3. the future staffing costs of other universities
4. the future staffing costs of the new university five years into the future

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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

What explains why the social cost of developing tourism on a remote island is greater than the private cost?

Select ONE answer:

1. the costs of building extra hotels on the island
2. the extra costs of providing the tourists with food
3. the travel costs paid by tourists who visit the island
4. the harm to the environment caused by the tourists

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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

In calculating the short-run supply schedule for a firm, what is assumed to remain unchanged?

Select ONE answer:

1. the number of consumers
2. the price of the good
3. the quantities of all factors
4. the state of technology

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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