Which of the following assumptions when constructing a PPF is INCORRECT?

the economy produces only three goods

Which is NOT a characteristic of a free market economy?

government control and intervention

What happens when leakages exceed injections?

The level of economic activity will contract

What does PPF stand for?

Production Possibility Frontier

Which statement is NOT TRUE for consumer sovereignty?

Business decides what they want to produce

Everything else remain unchanged, what happens when taxes are lowered ?

The level of economic activity will expand

Everything else remain unchanged, what happens when government spending is increased?

The level of economic activity will expand

What are the factors of production?

Land, Labour, Capital & Enterprise

What is opportunity cost?

Value of the next best alternative foregone

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Topic 1 - Intro to Economics

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Questions 30

Answers

1
What is the most reliable measure to compare income levels between countries?
Real GDP per capita at ppp
Nominal GDP
Real GDP at ppp
Real GDP per capita
2
Which of the following assumptions when constructing a PPF is INCORRECT?
Thw state of technology is constant
all resources are fully employed
the quantity of resources remain unchanged
the economy produces only three goods
3
The process where the forces of demand and supply interact to determine the price and quantity
Consumer sovereignty
Price soveriegnty
Price mechanism
Scarcity
4
Which is NOT a characteristic of a DOWNSWING?
Decreasing demand
Decreasing investment
Increasing unemployment
Increasing inflation
5
Which is NOT a sector in the circular flow of income?
Financial Sector
Government Sector
Households
Environmental Sector
6
Where did the GFC originate from?
Europe
Australia
China
USA
7
What does Gini co-efficient measure?
gender inequality
literacy level
life expectancy
income and wealth inequality
8
Which is NOT a characteristic of a free market economy?
consumer sovereignty
government control and intervention
Private ownership
Price mechanism
9
What happens when leakages exceed injections?
The level of economic activity will contract
The level of economic activity will stay the same
The level of economic activity will expand
None of the above
10
What is the main problem associated with a BOOM?
High unemployment
High inflation
High crime rate
High deflation
11
What does PPF stand for?
Production Possibility Function
Possible Product Frontier
Possible Product Function
Production Possibility Frontier
12
Where can you find UNATTAINABLE level of production with current technology and resources?
Unable to determine
Point below the PPF
Point above the PPF
Points on the PPF
13
Which statement is NOT TRUE for consumer sovereignty?
Business decides what they want to produce
Consumers send signals to producers through their demand
Producers produce g/s they think has highest demand
Consumer has the power to decide what goods to be produced
14
What is the main problem associated with a RECESSION?
High unemployment
High wages
High inflation
High deflation
15
Everything else remain unchanged, what happens when taxes are lowered ?
The level of economic activity will expand
The level of economic activity will contract
None of the above
The level of economic activity will stay the same
16
Which is NOT a leakage?
Investment
Savings
Taxation
Imports
17
Everything else remain unchanged, what happens when government spending is increased?
The level of economic activity will stay the same
None of the above
The level of economic activity will contract
The level of economic activity will expand
18
Which is another name for 'free market'?
Centrally-planned
Command
Laissez faire
Mixed
19
With the PPF, where can you find UNEMPLOYMENT of resources?
Point above the PPF
Point below the PPF
Points on the PPF
Unable to determine
20
What is the economic problem about?
Too much resources
Scarcity
Limited Wants
Unlimited resources
21
Which is NOT one of the key economic questions?
When to produce?
What to produce?
How to produce?
To whom to distribute?
22
What are the factors of production?
Land, Labour, Capital & Enterprise
Land, Labour, Rent & Enterprise
Land, Wage, Capital & Enterprise
Land, Labour, Capital & Profit
23
Which is Australia's rank in terms of HDI (which shows quality of life and living standards)?
12
1
2
11
24
Which country currently ranks NUMBER ONE in the HDI index?
Australia
Switzerland
Norway
USA
25
When did the GFC happen?
1997-98
2005-06
2010-11
2007-08
26
What does GFC stand for?
Global Financial Crunch
Greek Fried Chicken
Global Financial Crisis
Global Funding Crisis
27
Which is NOT a characteristic of a BOOM?
High spending and investment
High inflation
Low employment
High demand
28
Which diagram shows the movement of income through different sectors of the economy?
Circular Flow of Income
Production Possibility Frontier
Business Cycle
Economic Cycle
29
Australia is
A mixed economy
A free market economy
Not an economy
A centrally planned economy
30
What is opportunity cost?
Value of the next best alternative gained
The cost of the production
Value of the next best alternative foregone
Social cost

Topic 1 - Intro to Economics Flashcards | StudBud