Economics 1.1

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1. What does a production possibility frontier illustrate?

  • The outcome of production decisions made by the Government.
  • The trade-offs facing an economy that produces only two goods.
  • The opportunity cost of producing two goods in an economy instead of one.
  • The benefits of comparative advantage.
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2. Which of these is not a characteristic of a command economy?

  • Less utility gained from consumption.
  • Inefficient
  • Government controlled resources
  • Bigger wealth equality

3. Positive statements are...

  • Objective
  • Subjective
  • Opinions
  • Propaganda

4. Which of these is not a disadvantage of division of labour?

  • Difficult to motivate
  • Machinery may eventually replace workers
  • The firm receives a negative reputation for its treatment of workers
  • High labour turnover

5. What is specialisation?

  • When a country focuses on consuming goods they have an advantage in producing.
  • When a country produces goods that are hugely desirable across the world.
  • When a country focuses on producing goods they have an advantage in producing.
  • When a country creates specific trade deals with its neighbouring economies.
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