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Economics Mid Term Examination Form 5

This document contains a 30 question multiple choice economics midterm exam covering topics like: - The fundamental economic problem and factors of production - Specialization and productivity in the workplace - Factors that affect consumer and firm decisions - Opportunity cost and the production possibilities frontier - Demand, supply, and equilibrium in markets - Components of the current account and balance of payments - Characteristics and rewards of different factors of production - Causes of currency appreciation and factors that influence firm decisions The exam tests understanding of core microeconomics and macroeconomics concepts.

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Francinalanferman
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1K views6 pages

Economics Mid Term Examination Form 5

This document contains a 30 question multiple choice economics midterm exam covering topics like: - The fundamental economic problem and factors of production - Specialization and productivity in the workplace - Factors that affect consumer and firm decisions - Opportunity cost and the production possibilities frontier - Demand, supply, and equilibrium in markets - Components of the current account and balance of payments - Characteristics and rewards of different factors of production - Causes of currency appreciation and factors that influence firm decisions The exam tests understanding of core microeconomics and macroeconomics concepts.

Uploaded by

Francinalanferman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Economics Mid Term Examination Form 5

Multiple Choice
Select the correct option for each question.
1. What is the fundamental economic problem faced by any society?
Limited resources and unlimited wants
Unlimited resources and limited wants
The alternative forgone
Limited resources and limited wants
2. In an attempt to increase the efficiency of its staff, management assigns
specific tasks to each worker. This is an example of
Specialization
Progress
Productivity
Entrepreneurial ability
3. Which of the following is NOT an example of a factor of production in a
commercial bank?
Shareholders of the bank
Special saving account for students
The building
The bank’s vault
4. Rita and Paul are planning to buy a new house. All of the following factors
should affect the couple’s decision EXCEPT
Their joint monthly income
The possibility of a job promotion for Paul
The acquisition of a new home by Rita’s best friend.
The high cost of renting their current home
5. Which of the following best describes a ‘free good’?
A good that is given away by a retailer to promote the sale of another good.
One which gives no satisfaction to consumers.
One which has an infinite elasticity of supply
A good whose opportunity cost is zero
6. Economics is concerned with ALL of the following EXCEPT
The allocation of scarce resources to produce goods and services.
Explaining what factors influence consumer behaviour
The construction of buildings in the economy
The factors that determine the goods that a firm produce.

7. Economics may be defined as a “social science” since it deals with


The environment
Human behaviour
The economy
Production and consumption
8. An increase in the price of flour is MOST likely to be followed by an
immediate
Rise in the supply of flour
Fall in the supply of flour
Rise in the demand for bread
Fall in the demand for bread
9. Why do consumers have to make choices among the goods and services that
they purchase?
Their wants are scarce and their resources are limited
Their resources are insufficient to satisfy all their wants
Their resources increase more rapidly than their wants
They receive most of their goods and services at no cost
10. All of the following will cause an outward shift in the PPF curve
EXCEPT:
An advantage of technology
The use of unemployed resources
An increase in population
The discovery of a new natural resource
11. What is opportunity cost?
The alternative foregone
The choice made
Unlimited wants
Limited resources
12. Under which factor of production will you classify marine resources?
Capital
Land
Labour
Enterprise
13. Firms will produce more when
Costs are increasing
They expect profits to increase
Sales are declining
Resources become difficult to obtain

14. The rate of interest affects economic decisions in that:


The higher the rate of interest, the greater will be borrowing to buy cars and
consumer durables.
The lower the rate of interest, the higher will be the level of savings in
banks.
The higher the rate of interest, the lower will be borrowing to buy cars and
other consumer durables.
The lower the rate of interest, the lower will be borrowing to buy goods.
15. Michael purchases the latest Samsung Galaxy phone. His decision may have
been determined by all of the following EXCEPT
Level of education
The profits of the publisher
Personal choice
Bandwagon effect
16. When governments want to encourage firms to set up and produce, it will do
all of the following EXCEPT
Place subsidies on the goods the firm produces
Set up industrial zones
Provide infrastructure like roads and bridges
Place taxes on the goods the firm produces.
17. A situation where quantity demand exceeds quantity supplied at a given price
indicates
Surplus
Shortage
Equilibrium
Excess supply
18. Under what conditions will a firm employ less labour?
When industrial relations are poor
When labour is relatively cheap compared to other resources
When there is changing demand for the product
When the price of the product is falling.
19. Which of the following items would NOT appear in the current account of
the Balance of Payments account?
The export of goods to another country
The use of local banking services by a foreign company
Payment of dividends by a foreign company
Establishment of a steel industry by a foreign company

20. Which of the following rewards accrue to the factor of production referred to
as “capital”?
a) Rents
b) Profits
c) Wages
d) Interest payments
21. One example of an ‘entrepreneur’ is a/an
a) Shop owner
b) Store worker
c) Bank manager
d) Airline employee
22. Which of the following is NOT a service?
a) Education
b) Health care
c) Hairdressing
d) Motorcycle
Items 22 and 23 refers to the following diagram which illustrates the flow of goods
and services, factors of production, as well as money earned and spent between
firms and households (HH).
S
U

HH FIRMS

23. If U refers to goods and services, then S refers to


a) Rent
b) Profits
c) Wages
d) Expenditure

24. If V includes interests and wages, then T represents the flow of


a) Goods and money
b) Services and money
c) Factors of production
d) Services and investment
25. Which of the following is NOT a primary product?
a) Bauxite
b) Banana
c) Furniture
d) Petroleum
26. All of the following are features of land EXCEPT
a) It has no cost of production
b) It is geographically immobile
c) It is fixed in supply
d) It is a homogeneous factor
27. The currency of a country may appreciate in value if
a) The demand for its imports rises
b) The demand for its exports rises
c) Its balance of trade deficit rises
d) Its balance of payments deficit rises
28. Which of the following does NOT influence a cement-manufacturing firm in
making economic decisions?
a) The level of costs
b) The availability of resources
c) The strength of the workers’ trade union.
d) The government spending on tourism.
29. A factor that may cause the PPF curve to move outwards is:
a) The efficient use of resources
b) Depletion of natural resources
c) Fall in population through migration
d) Technological progress
30. Which of the following is NOT a characteristic of Caribbean countries?
a) High debt burden
b) High levels of unemployment
c) Low level of capital formation
d) Major producers of manufactured goods
Total 30 marks
END

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