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I Term revision

Grade 8
MCQ
1.What is the opportunity cost to the individual of the extra earnings when moving
from position X toposition Y?
A $20
B $80
C 4 hours leisure
D 8 hours leisure

2.Why will the economic problem never be solved?


(1) People will always want more products than can be produced.
(2) People will never agree on what is the best economic system.
(3) There will always be an uneven distribution of income.
(4) There will always be some people unemployed.
3 Which asset is not part of the factor of production land?
A a forest
B a natural harbour
C an oilfield
D a road

4.The table shows how employment in five industries changed in a country between
1985 and 2000.

According to the table, which type of employment has increased?


A primary
B secondary
C tertiary
D total
5.Which of the following is an advantage of the market economic system?
A It aims for equality of income.
B It ensures the provision of defence and law and order.
C It gives an incentive to produce.
D It reduces pollution and congestion.

6.Which action is evidence that a country is a planned economy?


AA central bank plans an interest rate change.
B A government plans the allocation of all resources.
C A local authority plans a new library.
D A ministry of finance plans the annual budget.
7.What might be a direct benefit to the individual worker of a specialised job?
ASpecialisation enables a better quality product to be produced.
BSpecialisation enables the firm to introduce more machinery.
C Specialisation enables the worker to become more skilled.
DSpecialisation makes better use of resources.
8.Which method of payment is a government official most likely to receive?
A commission
B hourly rates
C piece rates
D salary
9The table shows the various combinations of food and clothing which a village can
produce using allits resources.

What is the opportunity cost to the village of increasing the production of food from
200 to 300 units?
A 50 units of clothing
B 100 units of clothing
C 200 units of clothing
D 250 units of clothing
10. Why did planned economies often experience long queues for consumer goods?
A The factors of production were able to move freely.
B The distribution of goods was inefficient.
C The output decisions were taken to maximise profits.
D The needs of consumers determined production.
11 The diagram shows the choices for an individual between leisure and earnings.

What is the opportunity cost to the individual of the extra earnings when moving
from position X
to position Y?
A $20
B $80
C 4 hours of leisure per day
D 8 hours of leisure per day

12 Which economic question is least likely to arise as a result of scarcity?


A For whom shall we produce?
B How shall we produce?
C What shall we produce?
D When shall we produce?

13 Cleaning the streets can be an unpleasant job and yet in many countries it is
badly paid.
What is likely to be the reason for this?
A There is a high degree of trade union membership among these workers.
B There is a high supply of labour because the work is unskilled.
C There is a high demand for staff in busy urban areas.
D There is a long working year because there are few holidays.

14. A person planning for old age saves in the form of money rather than goods.
Which function does money perform when this is done?
A medium of exchange
B standard of deferred payment
C store of value
D unit of account
15 Which of the following factors is likely to cause wages in an occupation to be low?
Aextra responsibility
B rising unemployment
C the need for special skills
D unpleasant working conditions
16 What may cause an individual to save a higher proportion of their income?
A a belief that the price of goods will rise in the future
B a fall in the rate of interest paid by the countrys banks
C a fear that income will fall in the future
D a rise in the individuals wish to enjoy higher consumption immediately
17 On completing your studies, you decide you want to work in an organisation which is big
enoughto give you a chance of promotion, but where shift work will not normally be required.
Which of the following would be the best one to choose?
A a government office
B a hairdressing salon
C a hospital emergency department
D a local electricians
18.The table shows the proportion of income saved for different age groups.

What can be concluded from this data?


A The youngest age group spends more than the oldest age group.
B The 50 - 62 age group saves the highest proportion of its income.
C The 50 - 62 age group has the highest level of income.
D The older age groups earn more than the younger age groups.
19Which of the following is an example of cyclical unemployment?
A An airline cuts jobs in a world recession.
B Cleaners lose their jobs as more machines are used.
C Fishermen sell their boats owing to a reduction in fish stocks.
D Hotels employ fewer people in the rainy period.
20 What is an advantage for a worker in part-time rather than full-time
employment?
A a higher wage
B greater employment protection
C more opportunity for other activities
D greater chance of promotion
21 A student records her income and spending for the past month.
What function is money performing in this situation?
A medium of exchange
B standard of deferred payments
C store of value
D unit of account
22 What is most likely to be the main function of a central bank?
A controlling the money supply
B investing in commerce and industry
C issuing and processing credit cards
D making loans to individuals
23 What might explain why wages paid in a particular occupation are high?
A a large supply of labour
B a low price for the good produced
C a strong trade union
D pleasant working conditions

24In wartime conditions, cigarettes have been used as money.


What disadvantage do cigarettes have for trading compared with notes and coins?
A They cannot act as a medium of exchange.
B They have no intrinsic value.
C They lack durability.
D They make a double coincidence of wants necessary.

25What is the main purpose of a trade union?


A to achieve profit maximisation
B to encourage free trade
C to promote private ownership of industry
D to protect the interests of its members
26 Why might factory workers have higher wage rates than agricultural workers?
A Factory workers are in greater supply.
B Factory workers face fewer risks of accidents.
C Factory workers have cleaner working conditions.
D Factory workers use more productive equipment.
27The first worker in each pair of workers below is usually paid more.
In which case is this not likely to be the result of the first workers greater value to
the firm?
A a worker in a trade union compared with a worker with no trade union
B a worker with training compared with a worker with no training
C a worker with supervisory responsibilities compared with a worker with no
responsibility
D a worker with years of experience compared with a worker with no experience
28 In order to reduce unemployment, a government moves one of its departments
to a different part of the country, even though this is expensive.
Which type of unemployment is most likely to be reduced?
A cyclical
B frictional
C regional
D seasonal
29 Every business organisation faces the problem of satisfying wants.
What is the reason why wants are not fully satisfied?
A An economy can only produce a limited amount of goods and services.
B Governments cannot print enough money to pay for goods and services.
C There is an over-production of goods and services by business organisations.
D Workers are too skilled for the requirements of the jobs available.

30 As a result of a decrease in the demand for coal, several coal mines were closed.
What type of unemployment would this cause?
A cyclical
B frictional
C seasonal
D structural

31 On average, doctors earn more than bus drivers.


Which change would be likely to reduce the earnings gap between doctors and bus
drivers?
Aa decrease in the profits earned by bus companies
B a decrease in the qualifications needed to be a doctor
C an increase in demand for medical care
D an increase in the number of people passing the driving test
32 A survey of employment in a particular economy shows that the primary sector
was diminishing in importance and more people were being employed in the tertiary
sector.
What does this mean?
A Fewer people were employed by central government.
B Fewer people were employed in manufacturing industries.
C More people were employed in the service industries.
D More people were employed in agriculture.

33 In 2007 the average annual pay of a scientist in the UK was 37 290. The
average annual pay of a laboratory technician was 26 157.
What could explain this difference in earnings?
A Laboratory technicians have stronger bargaining power than scientists.
B Laboratory technicians have to work more unsociable hours than scientists.
C The period of training for scientists is longer than that for laboratory technicians.
D The supply of scientists is high relative to demand for their services.

34 Many fishermen are unemployed owing to long-term legislation to conserve fish


stocks in the
North Sea.
What type of unemployment is this?
A demand-deficient
B frictional
C seasonal
D structural
35 Which type of unemployment is generally regarded by economists as the least
serious for theeconomy?
A cyclical
B frictional
C regional
D structural

36 Which of the following is an example of cyclical unemployment?


A An airline cuts jobs in a world recession.
B Cleaners lose their jobs as more machines are used.
C Fishermen sell their boats owing to a reduction in fish stocks.
D Hotels employ fewer people in the rainy period.