ECS1601-short-questions.
MULTIPLE CHOICE QUESTIONS TESTBANK –
CHAPTER 1
Go to Memorandum
Answer the following questions by selecting the appropriate answer from the list below.
Question 1
Which one of the following statements is correct (or closest to correct)?
A. Economics is the study of...
M ULTIPLE CHOICE Q UESTIONS T ESTBANK –
CHAPTER 1
Go to Memorandum
Answer the following questions by selecting the appropriate answer from the list below.
Question 1
Which one of the following statements is correct (or closest to correct)?
A. Economics is the study of money.
B. Economics teaches us how to avoid choices.
C. Economics is the study of profit and loss.
D. Economics can be described as the study of choice.
E. Economics teaches one how to become rich.
Question 2
Which of the following is key to the way in which economists think?
A. Money
B. Wealth
C. Opportunity cost
D. Poverty
E. Balance sheet
Question 3
Which one of the following statements is incorrect?
A. Rich people do not experience scarcity.
B. Because resources are scarce, everyone has to make choices.
C. Every time a choice is made, opportunity cost is incurred.
D. The opportunity cost of a particular choice is the value of the best opportunity forgone
(sacrificed) as a result of the choice.
E. The central elements of economics are scarcity and choice.
Question 4
Which one of the following is a microeconomic issue?
A. The rate of economic growth in Japan.
B. The South African inflation rate.
C. The price of maize in Lesotho.
D. The unemployment rate in Zimbabwe.
E. The total production of goods and services in Zambia.
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Question 5
Which one of the following is a macroeconomic issue?
A. The demand for houses in Cape Town.
B. The supply of tomatoes in South Africa.
C. The price of bananas in Natal.
D. The total exports of South African goods and services to the rest of the world.
E. The total sales of beer in South Africa.
Question 6
Which one of the following is a macroeconomic concept?
A. The price of petrol.
B. The demand for potatoes.
C. The consumer price index.
D. The supply of pumpkins.
E. The e-toll fee in Gauteng.
Question 7
Which one of the following statements is correct?
A. Wants, needs and demand are essentially simply different terms that have the same
meaning.
B. Wants and needs are essentially the same, but differ from demand.
C. Needs and demand amount to the same thing.
D. Wants and demand are essentially the same – people only demand things that they want.
E. Demand differs from wants and needs.
Question 8
Which one of the following statements is incorrect?
A. Our wants are unlimited.
B. Our needs are limited.
C. Demand differs from wants and needs in the sense that it has to be backed by purchasing
power.
D. A typical example of market demand is a demand (claim) by a trade union for increased
wages.
E. People demand only the things that they want.
Question 9
Which one of the following statements is correct?
A. John is hungry. He wants a hamburger. John thus has a demand for a hamburger.
B. Peter is cold. He wants a blanket. Peter thus has a demand for a blanket.
C. Mary is ill. She thus needs medical attention.
D. Jack has money available to spend on chocolates. However, he may not demand chocolates
because he does not need chocolates to survive.
E. Paul has R5, but a bar of chocolate costs R10. Paul thus cannot have a demand for a bar of
chocolate.
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Question 10
Which one of the following statements is incorrect?
A. Choice always involves sacrifice.
B. Choice always involves opportunity cost.
C. Economists measure cost in terms of opportunity cost.
D. Economists consider only explicit monetary costs.
E. There are always costs involved in the use of scarce resources.
Question 11
Which one of the following statements is false?
A. The basic economic problem is one of choice.
B. Choice is necessary because of limited wants.
C. The means available to satisfy wants are limited.
D. The wants of human beings are unlimited.
E. The opportunity cost of producing a given commodity is the value of the best forgone
alternative which could have been produced with the factors of production used in its
production.
Question 12
Rich economies which produce more goods and services each year:
A. do not have an economic problem.
B. still have an economic problem.
C. do have an economic problem but are solving it.
D. give more money to the government to solve its problems.
Question 13
Which one of the following is a macroeconomic issue?
A. A sharp rise in the price of vegetables.
B. A shortage of maths teachers.
C. A surplus of tomatoes in Limpopo.
D. A rise in the inflation rate.
E. An increase in medical tariffs.
Question 14
John spends R5 000 on a new carpet. What is the opportunity cost to him of the carpet?
A. R5 000.
B. The land, labour and capital used in manufacturing the carpet.
C. The other things he could have bought with the R5 000.
D. The reduction in his bank balance due to purchasing the carpet.
E. The increased value of a better decorated house.
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