71 exam-style questions on Introduction to economics with answers and explanations. Six real samples below — the full set is free with an account.
Which of the following is NOT a factor of production?
Answer: money
The four factors are land, labour, capital and enterprise. Money is a medium of exchange, not a productive resource.
In a command (centrally planned) economy, resource allocation is primarily determined by
Answer: government central planners
In a command economy the state owns resources and decides allocation; in a free market the price mechanism decides. Most real economies are mixed.
An outward (rightward) shift of the whole production possibilities curve best represents
Answer: potential economic growth from more or better resources
Growth in the quantity or quality of resources, or better technology, shifts the whole PPC outward: potential output rises (potential growth). Actual growth is a rise in real output, shown as a movement from a point inside the curve towards it, not a shift of the curve itself.
Which of the following is a normative economic statement?
Answer: The government ought to reduce income inequality.
A normative statement is a value judgement about what should be. 'Ought to' signals an opinion, whereas the other statements are positive claims that can be tested against evidence.
Which of the following best describes the concept of opportunity cost?
Answer: The value of the next best alternative forgone when a choice is made
Opportunity cost is the value of the single next best alternative sacrificed, not the money price and not the sum of all alternatives forgone.
Which of the following is an example of a free good?
Answer: Sunlight
A free good has no opportunity cost because it is not scarce, like sunlight. Public education and free samples still use scarce resources — someone pays for them.
That was 6 of 71 Introduction to economics questions.
Practise all 71 freeA student writes: 'On Saturday I could have worked for $60, visited a friend or repaired my bicycle. I repaired my bicycle, so the opportunity cost is the $60 wage plus the visit to my friend.'
See the correction →DefineAO1 · 1–2 marks
Give the precise meaning — one sentence, the key terms in it, no example needed unless asked.
StateAO1 · 1–2 marks
One word or one short sentence. No explanation, no working: the mark is for the fact itself.
DistinguishAO2 · 2–10 marks
Make the difference clear for BOTH terms — a definition of one of them is only half an answer.
71 Introduction to economics questions — free with an account. Spaced repetition, streaks and full exam simulations included.
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