INSTITUTE OF DYNAMIC LEARNING
LEVEL O SENIORS
ECONOMIC TEST (SECTION 1)
Name: ……………………………..
Marks: 30
Q1-Production involves the use of the four factors of production. The use of these
resources involves an opportunity cost.
(a) Using appropriate examples, describe the four factors of production. [6]
(b) Using a production possibility curve, explain what is meant by opportunity cost. [5]
(c) Discuss whether more factors of production should be used to build houses. [8]
(d) What is meant by Economic Problem? [2]
(e) Explain the terms scarcity and opportunity cost. [4]
Q2- Select the best possible answer.
1- In a market, what does the entrepreneur decide?
A) the combination of resources used
B) the demand of the product
C) the equilibrium price of the product
D) the level of profits
2- What is an example of factor of process enterprise?
A) a shop assistant
B) a shop's profit
C) a shop owner
D) a shopping Centre
3- An economy is producing at X.
A) 25 Machines
B) 50 Units of food
C) 75 machines
D) 150 units of food
4- A person makes sandwiches at home for five hours each dat. She makes 20 sandwiches
per hour, and she sells each sandwich for $2 each.
What is the opportunity cost if she takes a holiday on a working day?
A) $2
C) $40
B) $20 sandwiches
D) 100 sandwiches
5- The diagram shows two Production possibility curves for an economy.
What could have caused the change in the economy’s production possibility curve from
XX to YY?
A) A decrease in the price ;level
B) A large number of industrial disputes
C) A major earthquake
D) An increase in unemployment