Download YEAR 10 HASS ECONOMICS REVISION Multiple Choice

YEAR 10 HASS ECONOMICS REVISION
Multiple Choice
1. Economics is the study of?
a) Production technology
b) Consumption decisions
c) How society decides what, how and for whom to produce
d) The best way to run society
2. A market can be accurately described as?
a) A place to buy things
b) A place to sell things
c) The process by which prices adjust to reconcile the allocation of resources
d) A place where buyers and sellers meet
3. A demand curve can shift to the right by all of the following, except:
a) A fall in the price of the good
b) An increase in the price of a compliment
c) A rise in the price of a substitute
d) An increased preference for the good
4. A supply curve can shift to the left due to all of the following, except:
a) An increase in taxes
b) A reduced subsidy
c) An increase in wages
d) An increase in the use of new technology
5. When is a market in equilibrium?
a) Quantity demanded equals quantity supplied
b) Excess demand and excess supply are zero
c) The market is cleared by the equilibrium price
d) All of the above
6. When the price of petrol goes up, demand for cars decreases. It implies that petrol and
cars are?
a) Complimentary goods
b) Substitute goods
c) Inferior goods
d) Normal goods
7. The next best alternative foregone while making a choice is known as?
a) Scarcity
b) Opportunity cost
c) Choice
d) Recession
8. Opportunity costs are a result of?
a) Scarcity
b) Overproduction
c) Technology obsolescence
d) Abundance of resources
9. In which type of economy do consumers and producers make their choices based on the
market forces of demand and supply?
a) Open economy
b) Controlled economy
c) Command economy
d) Market economy
10. The Production Possibility Frontier does not give the desirable point of production; it only
indicates the possible combination of __________________ that can be produced with
the available resources.
a) Two goods
b) Three goods
c) Number of goods
d) A single good
11. If a point falls inside the Production Possibility Frontier, what does it indicate?
a) Resources are over utilised
b) Resources are underutilised
c) There is unemployment in the economy
d) Both b and c
12. Which of the following is an important message that a Production Possibility Frontier
conveys to an economy?
a) It indicates the limited number of production possibilities during a given period of time
b) It shows the maximum amount of any good that can be produced with the available
resources
c) It shows the expected demand in the near future
d) Both a and b
Short answer and Data Interpretation
13. Last weekend your roommate told you “If I didn’t have a date tonight I would save 30
dollars and watch Friends re-runs on TV”.
Define opportunity cost. What is your roommate’s opportunity cost of his date?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
14. Use the production possibility frontier (the curve joining points A and B) shown below to
answer the following questions.
Margaret River Production Possibilities Frontier
(PPF)
Wine
K
E
A
X
S
F
H
O
J
B
M Cheese
a) Are there any non-feasible production points? If so, what are they and why are they nonfeasible?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
b) Given the current PPF (the curve joining points A and B) would Margaret River choose to
produce at point H? Why or why not?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
c) Given the graph above, Margaret River’s opportunity cost of producing more cheese in
terms of wine changes in what way as we move from point A to B? Give the definition of
the law this illustrates.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
d) Suppose Margaret River experiences a long-term water drought that reduces its ability to
produce all agricultural goods. The new Margaret River production possibility frontier will
most closely resemble a curve joining which two letters?
______________________________________________________________________
______________________________________________________________________
e) Suppose a new hormone is invented which allows Cows to greatly increase their milk
production and therefore cheese production in Margaret River increases dramatically.
Assuming the PPF is originally the curve joining points A and B, the new Margaret
River’s PPF will most closely resemble a curve connecting which two points?
______________________________________________________________________
______________________________________________________________________
15. Atlantis is a small, isolated island. The inhabitants grow potatoes and catch fish. The
accompanying table shows the maximum annual output combinations of potatoes and
fish that can be produced.
Production
Possibility
A
B
C
D
E
F
Quantity of
Potatoes (Kilos)
1,000
800
600
400
200
0
Quantity of Fish
(Kilos)
0
300
500
600
650
675
a) Draw a Production Possibility Frontier illustrating these options and showing points A–F.
b) Can Atlantis produce 500 kilos of fish and 800 kilos of potatoes? Explain. Where would
this point lie relative to the Production Possibility Frontier?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
c) What is the opportunity cost of increasing the annual output of potatoes from 600 to 800
kilos?
______________________________________________________________________
______________________________________________________________________
d) What is the opportunity cost of increasing the annual output of potatoes from 200 to 400
kilos?
______________________________________________________________________
______________________________________________________________________
e) Can you explain why the answers to parts c and d are not the same?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________