Economic Exam Paper Uk as

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SECTION 1: QUESTION 1 – MULTIPLE CHOICE QUESTIONS Answer ALL the questions (each worth one mark) on the separate Answer Sheet provided. Choose the single most correct answer. You are advised not to spend more than 20 minutes on this question Question 1 The basic economic problem is: A. Abundance B. Scarcity C. Obesity D. Productivity Question 2 The opportunity cost to society of constructing a motorway would be: A. The money spent on the road B. The goods and services that could otherwise have been produced had the road not been constructed C. The cost of government borrowing to finance the cost of the new road D. The increased taxation needed to pay the cost of the new road Question 3 A demand curve shows that: A. an increase in price brings about an increase in quantity demanded B. a decrease in price brings about an increase in quantity demanded C. an increase in price does not change the quantity demanded D. a decrease in price does not change the quantity demanded Question 4 When there is an increase in the quantity demanded, the Demand curve shifts: A. to the right B. to the left C. up D. down Question 5 Benefits lost from the next best alternative are known as: A. Opportunity Cost B. Sunk Cost C. Fixed Cost D. Relevant Cost Question 6 A Production Possibility Frontier (PPF) shows: A. the different combination of output which can be produced if all resources are fully and efficiently used B. a single output that can be produced if all resources are fully and efficiently used C. the different combination of output which can be produced if all resources are not fully and efficiently used D. a single output which can be produced if all resources are not fully and efficiently used Question 7 What does the line PQR on Production Possibility Frontier show? Cars P Q S R Trucks A. The use of resources is not maximised B. The use of resources is

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