Lesson 1.1.3

1.1.3 The economic problem Quiz: Pearson Edexcel Economics, Unit 1

20 questions

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Lesson 1.1.3, The economic problem: 20 multiple choice questions for the Pearson Edexcel Economics (9EC0), Unit 1: Theme 1: Introduction to markets and market failure, written with Revision Ninja.

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The 20 questions

  1. What is the primary cause of the fundamental economic problem?

    • Trade balance deficits
    • Scarcity of resources
    • Excessive government spending
    • High inflation rates

  2. Which of the following is an example of a renewable resource?

    • Coal
    • Natural gas
    • Crude oil
    • Timber

  3. Which of the following is classified as a non-renewable resource?

    • Solar power
    • Timber
    • Coal
    • Wind energy

  4. What term describes the value of the next best alternative forgone when making a decision?

    • Marginal cost
    • Sunk cost
    • Fixed cost
    • Opportunity cost

  5. Why does scarcity exist in both developed and developing economies?

    • Populations are falling
    • Resources are finite
    • Taxes are high
    • Markets are inefficient

  6. If a government spends £5 billion on a new railway instead of healthcare, what is healthcare?

    • The opportunity cost
    • The external cost
    • The sunk cost
    • The fixed cost

  7. Which economic agents face the problem of scarcity?

    • Governments only
    • Consumers only
    • Producers only
    • All economic agents

  8. A government spends £10 million on a school instead of a road. What is the opportunity cost?

    • The £10 million
    • The new school
    • The forgone road
    • Future tax revenue

  9. A farmer chooses wheat over barley, forgoing £4000 of barley. What is the opportunity cost?

    • The wheat harvested
    • Zero
    • £4000 cash profit
    • £4000 barley output

  10. What causes the economic problem for a household with a limited budget?

    • Lack of goods
    • Price inflation
    • High interest rates
    • Scarcity of income

  11. Which resource used in production is classified as non-renewable?

    • Timber
    • Solar power
    • Wind energy
    • Crude oil

  12. What main decision must a country make due to a finite supply of land?

    • Price control
    • Resource allocation
    • Currency devaluation
    • Trade protection

  13. Why does a production choice by a firm always involve an opportunity cost?

    • Taxes are levied
    • Profits are guaranteed
    • Prices are fixed
    • Resources are scarce

  14. A student spends three hours revising maths instead of economics. What is the opportunity cost?

    • Economics revision forgone
    • The exam grade
    • Maths revision gained
    • Three hours saved

  15. A government funds solar subsidies instead of flood defences. What is the opportunity cost?

    • The flood defences
    • The solar panels
    • The tax revenue
    • The subsidy cost

  16. Why does the fundamental economic problem persist even in wealthy nations?

    • Prices are high
    • Resources are infinite
    • Incomes are falling
    • Wants are unlimited

  17. What happens to scarcity when an economy's production possibility frontier shifts outwards?

    • Wants are satisfied
    • Opportunity cost vanishes
    • Scarcity still exists
    • Scarcity is eliminated

  18. What is the primary opportunity cost of extracting non-renewable oil rapidly today?

    • Present consumption
    • Current energy prices
    • Existing technology
    • Future oil availability

  19. Why do different economic agents experience different opportunity costs for their choices?

    • Differing alternatives
    • Uniform incomes
    • Identical resources
    • Fixed technology

  20. When should a government proceed with a project that has an opportunity cost?

    • Zero scarcity exists
    • Unemployment is high
    • Benefits exceed costs
    • Costs exceed benefits

All Pearson Edexcel Economics quizzes