Lesson 1.2.2
1.2.2 Economic efficiency: productive and allocative Quiz: OCR Economics, Unit 1
20 questions
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Lesson 1.2.2, Economic efficiency: productive and allocative: 20 multiple choice questions for the OCR Economics (H460), Unit 1: Introduction to Microeconomics, written with Revision Ninja.
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The 20 questions
-
What is the main objective of a private firm in a market economy?
- Utility maximisation
- Profit maximisation
- Cost minimisation
- Welfare maximisation
-
In which economic system are resource allocation decisions made solely by the state?
- Free enterprise economy
- Market economy
- Planned economy
- Mixed economy
-
At what point on the average cost curve does productive efficiency occur?
- Minimum average cost
- Zero average cost
- Maximum total cost
- Minimum marginal cost
-
Allocative efficiency is achieved when price equals which economic value?
- Marginal cost
- Total cost
- Fixed cost
- Average revenue
-
What is the value of the next best alternative foregone when a choice is made?
- Marginal cost
- Sunk cost
- Opportunity cost
- Accounting cost
-
Which function of money eliminates the need for a double coincidence of wants?
- Unit of account
- Medium of exchange
- Store of value
- Deferred payment unit
-
What is a major disadvantage of extreme division of labour for workers?
- Decreased productivity
- High training costs
- Slower production speed
- Monotony and boredom
-
What type of demand exists when two goods are bought together?
- Derived demand
- Composite demand
- Joint demand
- Competitive demand
-
What does a point lying inside a Production Possibility Curve represent?
- Productive efficiency
- Inefficient resource use
- Unattainable output level
- Maximum economic growth
-
Which event causes an outward shift of a country's Production Possibility Curve?
- Higher unemployment
- Technological progress
- Resource reallocation
- Lower consumer demand
-
If the price of key raw materials rises, how does the supply curve move?
- No shift occurs
- Movements downward
- Shifts left
- Shifts right
-
An increase in income causes a leftward demand shift for which type of good?
- Inferior good
- Complementary good
- Substitute good
- Normal good
-
What market condition exists when quantity demanded exceeds quantity supplied at a given price?
- Excess demand
- Consumer surplus
- Market equilibrium
- Excess supply
-
What term describes the difference between what consumers are willing to pay and the actual price?
- Producer surplus
- Economic profit
- Deadweight loss
- Consumer surplus
-
Assuming supply is upward sloping, what happens to producer surplus if market price rises?
- Stays constant
- Increases
- Decreases
- Falls to zero
-
Moving along a PPC yields 2 extra cars but 10 fewer bikes. What is opportunity cost per car?
- 5 bikes
- 2 bikes
- 10 bikes
- 0.2 bikes
-
Which factor determines which point on a PPC is allocatively efficient?
- Maximum output level
- Consumer preferences
- Lowest tax rate
- Equal resource division
-
What type of demand exists when a good is required for several different uses?
- Composite demand
- Joint demand
- Competitive demand
- Derived demand
-
Which mechanism coordinates resource allocation between consumers and producers in a free market?
- Central planning board
- Price mechanism
- Fiscal policy
- Government regulation
-
Why is the ceteris paribus assumption used in economic demand and supply analysis?
- Ignore resource scarcity
- Isolate single variables
- Eliminate market prices
- Balance government budgets
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