A- LEVEL ECONOMICS

20 MULTIPLE CHOICE QUESTIONS

WITH

INVESTOR BEN
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1. Which of the following statements about factors of
production is false?

a) The term 'factors of production' is another term for

resources.
b) The factor of production termed labour means human
resources.
c) The factor or production termed land means natural
resources.
d) The factor of production termed capital means the
money which the owners of firms need in order to set
their firms up.
2. Which of the following statements about the use of
resources is not one of the key questions in economics?
a) How are resources used?
b) Where are resources used?
c) For what are resources used?
d) For whom are resources used?

3. A normative statement is
A verifiable by facts.
B objective.
C based on an opinion.
D based on real world data
5. Which one of the following is a positive statement?
A The government should reduce the standard rate of
income tax.
B The government ought to cut social security benefits.
C A cut in social security benefits will increase incentives
to work.
D There needs to be an increase in defence spending.

6. The factor of production, capital includes

A money.
B computers.
C an overdraft.
D a mortgage
7. Economics is the study of
A how to increase economic growth.
B how society allocates scarce resources in order to
maximise welfare.
C how to ensure that resources are shared equally.
D how resources should be allocated

8. An economic good is
A one which has an opportunity cost.
B also defined as a factor of production.
C one which increases economic efficiency.
D the opposite of a public good.
9.A family inherited £15,000 from a long lost aunt. They are
weighing up whether to buy a new
car or go on a trip to Australia for a month. They decide to go to
Australia. The opportunity
cost of this decision is
A the cost of going to Australia.
B the cost of a buying a new car.
C the benefits of going to Australia.
D the benefits of having a new car

10. Which one of the following statements is false? At all points on

the production possibility curve
A. there is productive efficiency.
B. resources are allocated efficiently.
C resources are fully employed.
11. A demand curve is drawn on the assumption that
a) Quantity demanded always increases as price falls.
b) Changes in price do not influence supply.
c) Price elasticity of demand does not vary along the demand
curve.
d) Factors affecting demand, other than price, remain constant.

12.
If demand for a product is unit elastic, for a given percentage
increase in price, total revenue will

a) Rise by the same percentage.

b) Rise by a smaller percentage.
c) Fall by the same percentage.
d) Remain unchanged.
20. Which of these statements is/are wrong?
A. The demand curve for a product is derived from its
Marginal Utility curve
B. Price floor is set above the equilibrium market price
C. A & B
D. None
ANSWERS
11. D

12. D
1. D
2. B 13 (28). A

3. C 14 (02). D
4 (10). D 15 (18). A
5. C
16 ( 3). D
6. B
17( 12). A
7. B
8. A 18(4). B

9. D 19(3). B
10. B 20. D