IMSU Economics 2011/2012 Past Questions

Practice each question, then open it to see the full details.

In economics the central problem is:

A.scarcity
B.allocation
C.money
D.production

Indicate below what is NOT a factor of production.

A.Land
B.Capital
C.A Bank loan
D.Labour.

Macroeconomics deals with:

A.economic aggregate
B.the behaviour of the electronics industry
C.the activities of individual units'
D.the behaviour of firms

Microeconomics is not concerned with the behaviour of:

A.firms
B.industries
C.consumers
D.aggregate demand

The study of inflation is part of

A.macroeconomics
B.microeconomics
C.descriptive economics
D.normative economics

Aggregate supply is the total amount:

A.of products produced by a given industry.
B.of goods and services produced by the government
C.of labour supplied by all households.
D.of goods and services produced within an economy.

The total demand for goods and services in an economy is known as:

A.aggregate demand.
B.economy-wide demand.
C.gross national product
D.national demand.

A.a decrease in the overall price level
B.a decrease in the overall level of economic activity.
C.an increase in the overall price level
D.an increase in the overall level of economic activity

A recession is:

A.a period of declining unemployment.
B.a period during which aggregate output declines.
C.a period of declining economic activities
D.a period of very rapidly declining prices.

Unemployment means that:

A.people are not willing to work at the going wage rate.
B.at the going wage rate, there are people who want to work but cannot find work
C.there are some people who will not work at the going wage rate.
D.there is excess demand in the labour market.

If marginal benefit is greater than marginal cost, a rational choice involves:

A.less of the activity
B.more or less, depending on the benefits of other activities.
C.no more of the activity.
D.more of the activity.

Student chooses to study because the marginal benefit is greater than the ______ cost.

A.average
B.marginal
C.expected
D.total

The concept of opportunity cost:

A.would be irrelevant if we eliminated poverty.
B.suggests a major increase in public health-care spending means an expansion in other areas will be harder to achieve.
C.suggests all our wants can be achieved.
D.is relevant only for a capitalist economy like the United States.

Opportunity cost is

A.that which we forgo, or give up, when we make a choice or a decision.
B.the additional benefit of buying an additional unit of a product.
C.a cost that cannot be avoided, regardless of what is done in the future.
D.the cost incurred in the past before we make a decision about what to do in the future.

A graph showing all the combinations of goods and services that can be produced if all of society's resources are used efficiently is a:

A.circular-flow diagram
B.capital consumption frontier
C.production possibility curve.
D.Lorenz curve.

Periods of less than full employment correspond to:

A.either points inside or outside the production possibility curve.
B.points inside the production possibility curve.
C.points on the production possibility curve.
D.points outside the production possibility curve.

The circular flow of goods and incomes shows the relationship between:

A.goods and services.
B.wages and salaries.
C.firms and households.
D.income and cost of goods and services

In a free market system, the amount of goods and services that any one household gets depends upon its:

A.wage and interest income.
B.wealth.
C.income and wealth.
D.income.

In a planned or command economy, all the economic decisions are taken by the:

A.consumers
B.voters.
C.government.
D.workers.

Which one of the following is a normative statement?

A.Inequality in the distribution of income is a more serious problem than unemployment.
B.Inflation is rising.
C.The richest 10 per cent of the population has had a bigger percentage increase in incomes over the past 10 years than the poorest 10 per cent.
D.The proportion of people's income paid in taxes is higher under this government than under the previous one.