Economics 2021 T1A Exercise
Economics 2021 T1A Exercise
Economics 2021 T1A Exercise
1. Which one of the following statements best describes the nature of economics?
3. Resources are:
a. The natural assets of a country
b. The inputs used to produce goods and services
c. The goods and services that are the product of the production process
d. Unlimited
Multiple choice questions 4 & 5 refer to the following Production Possibility Frontier for a hypothetical economy that
produces only beef and fish.
4. The opportunity cost of moving from point B to point A in the PPF above is:
a. 20 units of beef
b. 20 units of fish
c. 10 units of beef
d. 10 units of fish
5. Point F in the PPF shows a combination of production that may occur in the future if there is:
a. During the COVID pandemic, Australia’s growth rate was low positive / normative
b. Cutting taxes is the best way boost economic growth positive / normative
3. Identify the type of efficiency referred to in the following statement (circle) 2 marks
a. Using the least cost method of production and minimising resources used allocative / productive
b. Using resources to satisfy as many needs and wants as possible allocative / productive
4. Define the term resources. Using examples, distinguish between the three types of resources. 6 marks
5. Distinguish between material living standards and non-material living standards. Provide examples to
demonstrate your understanding. 4 marks
6. Explain why the existence of relative scarcity leads to opportunity cost. 4 marks