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Year 11 Preliminary HSC Economics ‐ Multiple Choice Questions
Part 1 ‐ Easy
1
Which of the following statements best describes the economic problem?
(A)
Resources are always used for their most efficient uses
(B)
Market prices tend to fluctuate to reflect changes in consumer demand
(C)
Unlimited resources are used to satisfy the limited wants of consumers
(D)
Resources are limited in relation to the unlimited wants of consumers
2
The solution to the economic problem is choice. What are the three main choices an economy faces?
(A)
How to Produce?; What and How Much to Produce?; To Whom to Distribute?
(B)
How to Produce?; What and How Much to Consume?; To Whom to Distribute?
(C)
How to Consume?; What to Consume?; Who to Consume it with?
(D)
How to Satisfy wants?; How to Satisfy Needs?; How to Deal with Limited Resources?
3
Which of the following are the four factors of production?
(A)
Wages, social welfare, interest and commission
(B)
Wages, rent, interest and profit
(C)
Land, labour, capital and enterprise
(D)
Wages, rent, interest and commission
4
Which of the following describes the opportunity cost of consuming a certain good?
(A)
The market price of the good
(B)
The price paid for the resources used to produce the good
(C)
The other goods a consumer has given up in order to purchase the good
(D)
The other goods which could be produced with the same resources
5
The following diagram shows a production possibility curve in an economy.
Which of the following is the opportunity cost of increasing food output from 40 to 80?
(A)
30 units of clothing
(B)
150 units of clothing
40 units of food
(C)
80 units of food
(D)
6
Which of the following statements best describes relative scarcity?
(A)
The existence of limited needs and wants and unlimited resources
(B)
The scarce supply of all goods and services
(C)
The existence of limited resources and unlimited needs and wants
(D)
The limited supply of resources is insufficient to eliminate poverty
7
Which of the following can cause an inward movement in a production possibility frontier?
(A)
The use of less resources in production
(B)
Higher productivity of existing resource use
(C)
Producing less of one good and more of another good
(D)
An improvement in the rate of technological progress
8
What is the Marginal Rate of Substitution?
(A)
The ability to achieve a point on the production possibility frontier
(B)
The rate at which consumers substitute one product for another
(C)
The opportunity cost of substituting between one good and another
(D)
The opportunity cost of production vs. not producing
9
The factor return or factor income for land is?
(A)
Wages and Salaries
(B)
Rent
(C)
Profit
(D)
Housing
10
The factor return for Enterprise is?
(A)
Business Revenue
(B)
Profit
(C)
Wages and Salaries
(D)
Entrepreneurial Effort
Year 11 Preliminary HSC Economics ‐ Multiple Choice Questions
Part 2 ‐ Intermediate
11
Wants that are interchangeable for other wants are called
(A)
Complementary Wants
(B)
Luxury Wants
(C)
Substitute Wants
(D)
Swapping Wants
12
Wants that are demanded by the community as a whole are
(A)
Group wants
(B)
Collective Wants
(C)
Recurring Wants
(D)
Private Goods
13
A Porsche is an example of a
(A)
Basic Want
(B)
Recurring Want
(C)
Luxury Want
(D)
Resource
14
Allocative efficiency is best described by
(A)
Resources allocated efficiently
(B)
Resources allocated according to the preferences of consumers and society
(C)
Luxury Want
(D)
Resource
15
The future implication of a consumer choosing to save money is that…
(A)
They have lower standard of living in the present because they cannot consume as much
(B)
They have a higher standard of living in the future because they will have money to spend then
(C)
They have a nest egg (the "precautionary" motive of saving)
(D)
All of the above
Year 11 Preliminary HSC Economics ‐ Multiple Choice Questions
Part 3 ‐ Hard
16
Which of the following best describes a possible cause for this movement of the production possibility frontier in Country A from P1P1 to P2P2
(A)
(B)
(C)
(D)
17
Which of the following best describes the production possibility frontier below:
(A)
(B)
(C)
(D)
18
Country A discovers more clothing
Country A decides to produce more clothing
Country A produces less food
Country A gets twice as efficient at producing clothing
Country A can produce unlimited clothing
Country A can ONLY produce 100 units of clothing ‐ no less, no more
Country A cannot produce Food and can produce 100 units of clothing
Country A could produce 50 units of food but is currently producing 100 units of clothing
A production possibility frontier can be drived from…?
(A)
A production possibility frontier
(B)
An assumption about constant marginal rate of substitution
(C)
A and B
(D)
None of the above
19
Which of the following best describes consumer goods
(A)
Goods that are consumed by ordinary people
(B)
Goods which give immediate satisfaction of wants
(C)
Goods that can be consumed (e.g. food and water)
(D)
Goods that are produced by firms
20
Which of the following is a real example of a government regulating economic behaviour in Australia
(A)
Setting prices for basic foodstuffs
Determining production targets for businesses
(B)
(C)
Protecting workers through minimum wage regulatrions
(D)
Establishing public companies to compete ewith private companies
Year 11 Preliminary HSC Economics - Short Answer Questions
Part 1 - Content
1
Explain the difference between needs and wants
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(2 marks)
2
Provide definitions for the four factors of production
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(2 marks)
3
Explain how choices faced by societies have an opportunity cost
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(3 marks)
4
Explain what is meant by the marginal rate of substitution and provide an
example
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(3 marks)
Year 11 Preliminary HSC Economics - Short Answer Questions
Part 2 - Skills
The following table shows a production possibility schedule for food and clothes in a
hypothetical economy using a fixed quantity of resources
Food
Clothes
500
0
400
1000
300
200
200
300
100
400
0
500
1
Construct a production possibility curve using the table
(2 marks)
2
State the opportunity cost of producing the first 100 units of food and the first (2 marks)
100 units of clothes
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3
Explain how the discovery of new resources and improvements in technology
could affect food and clothing production in this economy
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(2 marks)
4
Explain TWO ways in which an economy operating within its production
possibility frontier could achieve full employment of its resources
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(4 marks)