PPSC Economics Chapter 1 Basic Economics With Answers

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PPSC Economics Chapter 1 Basic Economics

Sr. # Questions Answers Choice
1 According to the law of diminishing utility. Utility is at a maximum with the first unit Increasing units of consumption increase the marginal utility Marginal product will fall as more units are consumed Total utility will rise at a falling rate as more units are consumed
2 Demand for a normal product may shift outwards if. Price decreases The price fo a substitute falls the price of a complement rises Income falls
3 There are three fundamental questions every society must answer Which of the following is one of these questions. What goods and services are to be produced. How are the good and services to be produced. Who will get the goods and services what are produced. All of the above
4 Any combination of products inside the production possibility frontier is Allocatively inefficient X inefficient Consumer inefficient Productively inefficient
5 The resources in an economy are Constantly increasing Fixed at any moment Constant decreasing Able to be transferred easily between industries
6 The resources in the economy do not include. Demand Land Labor Capital
7 An economy may operate outside the production possibility frontier it. It is not utilizing its resources fully It is being productively efficient It is a maxed economy It is trading with other economics
8 In a free market the combination of products produced will be determined by. Market forces of supply and demand The government The law The public sector
9 Economics given can be shown by An inward shift of the production possibility frontier A movement down the production possibility frontier An outward shift of the production possibility frontier A movement up the production possibility frontier
10 If an economy is productively efficient. Everyone is wealthy Resources are unemployed More of one product can only be produced if less of another product is produced. The distribution of income is equal
11 Which of the following is a normative statement in economics. More spending by the government reduces poverty Higher taxes lead to less desire to work the UK Economy is growing fast relative to other European Union members The Government should concentrate on reducing unemployment
12 The public sector includes. Investors owning companies Government ownership of assets Market forces of supply and demand All trade via barter
13 In a command economy The price mechanism acts as an incentive Resources are allocated by market forces Individual firms make decisions for themselves about what to produce and how to produce it. The public sector is large
14 A mixed economy Has supply but not demand Has demand but not supply Has supply and demant Has market forces and government intervention
15 The free market involves The free provision of products The subsidizing of products by the government Market forces of supply and demand All trade via barter
16 The fundamental economic problem faced by all societies is. Unemployment Inequality Poverty Scarcity
17 Revealed preference theory was presented by. Samuelson Hicks Marshall rICARDO
18 Which of the following is not one of the basic economic questions. What is produce Who to produce for How to produce How to maximize economic growth
19 The sacrifice involved when you choose a particular course of action is called the Alterative Opportunity cost Consumer cost Producer cost
20 Human wants are Always fixed Limited Unlimited Likely to decrease over time
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