Grade 08: Weekly Assignment 10

Thursday, March 02, 2006

Grade: 08           


Exercise 01. Underline the one you consider correct.
1. The income earned by the factor of production, ‘enterprise’ is
a)         interest                        
b)         profit
c)          rent                                         
d)         wages or salaries

2. The resources used by countries to produce goods and services are called
a)            Factors of production
b)            Sectors of production
c)             Production
d)            Productivity

3. Why human wants are virtually unlimited?
a)            Repeated use of goods make us bored
b)            New goods did not become available
c)             Resources are also unlimited
d)            Scarcity is not a true problem

4. Which of the following best describes ‘land’?
a)            All natural resources
b)            The physical and mental work of people
c)             All man-made tools and machines
d)            All managers and organizers

5. The reward paid to the owners of money and capital is
a)            Rent
b)            Interest
c)             Profit
d)            Wages

6. The USSR and North Korea are examples of
a)            Command economy
b)            Market economy
c)             Mixed economy
d)            Laissez fair economy

7. A gardener decides to grow carrots on his allotment, so that, no potato is now grown. What is the opportunity cost of this action?
a)            Potato he has foregone                          
b)            Cost of cultivating carrot
c)             Selling price of carrot
d)            Profit for the gardener
8. Thirty students of our class went to the canteen to buy Coke and Biscuits. But at that time only 25 bottles of Coke were available. This means that:
            a)         Coke was scarce
            b)         all of them bought Coke
            c)         all of them bought Coke and Biscuits
            d)         Coke was available but not tasty

9. A carpenter cuts down trees for hardwood timber. What is the opportunity cost of this to the society?
a)            The forest that is destroyed
b)            The cost of tables made
c)             The depreciation of table making factory
d)            Cost of advertising tables

10. The way by which a country solves its economic problems are called
a)            Economic system
b)            Economic questions
c)             Economic problem
d)            Economic goods

11. Equal distribution of income and wealth is one advantage of
a)            Command economy
b)            Market economy
c)             Mixed economy
d)            Traditional economy

12. One argument in favour of the free market economy is
            a)         it allows government interventions in industries
            b)         it results in the full employment of labour
            c)         it ensures freedom of choice for producers
            d)         it distributes income and wealth more equally

13. Public health is provided by the government because it is
            a)         under-provided by the market                
b)         low-priced
            c)         not provided by the market                    
d)         durable in nature

14. A free market economy is characterized by
            a)         more government intervention               
b)         more freedom of choice
            c)         no consumer sovereignty                                   
d)         no private property right

15. In a mixed economy, what determines the allocation of resources?
            a)         central authorities only
            b)         central authorities and firms only
            c)         central authorities, firms and consumers
            d)         consumers only
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