Economics section A

This is based on all choice questions from unit 1 of microeconomics. Most of these questions are from many different past papers. 

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1. In a market based economy the scarcity of factors of production means that

  • consumers must inevitably consider the opportunity cost of their choices.
  • the economy cannot produce on its production possibility frontier.
  • inflation is inevitable.
  • the economy cannot achieve economics growth every year.
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2. What are goods provided by the government for people who are deemed to need them called?

  • Negative externalities.
  • Merit goods.
  • Positive externalities.
  • Demerit goods.

3. Which one of the following is a positive economics statement?

  • The rate of unemployment is too high.
  • The national minimum wage rate should be increased to £5 per hour for all workers.
  • The extent of income inequality in the United Kingdom has increased over the last 30 years.
  • Nurses working the National Health service should be on a maximum working week of 50 hours per week.

4. Which one of the following is NOT an example of the use of government fiscal policy? A change in

  • the size of the budget deficit.
  • a tax imposed on imports of goods and services.
  • interest rates.
  • government spending on National Health service.

5. Good X is an inferior good. A rise in consumers' income is likely to lead to:

  • A rise in demand and an increase in market price and quantity sold.
  • A fall in demand and an increase in market price and quantity sold.
  • A fall in demand and an fall in market price and quantity sold.
  • An expansion of market supply following an increase in demand.

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