Part 01

Underline the most suitable answer.

1. Father of economics is
a) Paul Samuelson b) Adam Smith
c) Lionel Robins
d) Alfred
Marshall
2. The branch of economics that studies the decisions of individual household and
firms is called
a) Macroeconomics
b) Micro economics c) home economicsd) Positive
economics
3. The next best alternative forgone is the
a) Choice
b) Alternative uses of resources
c) Scarcity d) opportunity
cost
4. Since human wants are unlimited but resource are limited. Ever society must
a) Make choices about what is to be produced how and far whom
b) Determine how production takes place and not on how output is distributed
c) Solve the problem of distribution of goods but not of production
d) Solve the problem of productive efficiency
5. The PPC shows,
a) The level of output that should be produced to satisfy most of its unlimited
wants.
b) The opportunity cost and alternative uses of resources
c) The demand for goods in an economy
d) The productivity of only one good in an economy
6. A PPC concave to origin shows
a) Decreasing opportunity cost c) increasing opportunity cost
b) Constant opportunity cost
d) All of the above
7. The main idea expressed in the definition of economics is
a) The price and quantity demanded of an economic good are inversely related
b) Scarce resource have alternative uses
c) A market system is necessary to distribute goods and service efficiently to
member of society
d) Equal distribution of economic good and service is a goal of most economic
systems.
08. A feature which is not suitable tor land is
a) It is a factor of production
c) It is a gift of nature
b) It is inelastic in supply
d) It can be depreciated with usage
09. Market economy depends mainly on,
a) Price mechanism
b) Social welfare
c) Demand and supply
d)
Government
10. Scarcity arises due to,
a) Unlimited resources
b) Limited wants c) Limited resources
d) None of
the above

Part 2
Answer all questions
1. Distinguish between human needs and wants
2. Explain why societies always face the problem of choice
3. Explain the relationship between scarcity and opportunity cost
4. What is meant by a production possibility curve?
5. Explain the typed of PPC
6. How does entrepreneurship differ from the other factors of productions
7. Differentiate between market economy and centrally planned enonomy
8. Write the assumptions that should be made before drawing a PPF
9. Define productivity
10.Write 02 characteristics of labour as a factor of production
11.What are the 03 basic economic questions any economic system must address
12.How different types of economic systems answer the basic economic questions?