4.1.1.4 Scarcity, choice and the allocation of resources Quiz: AQA Economics, Unit 1

The 20 questions

1. What is the fundamental economic problem facing all societies?

   • Deficit
   • Scarcity
   • Unemployment
   • Inflation

2. Scarcity occurs because limited economic resources are set against what?

   • Fixed prices
   • Unlimited wants
   • Limited wants
   • Excess supply

3. What term describes the benefit foregone of the next best alternative?

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

4. A student earns £60 working instead of studying for an exam valued at £40. What is the opportunity cost?

   • £40
   • £60
   • £20
   • £100

5. What primary cause forces economic agents to make choices about resource allocation?

   • Unlimited resources
   • Limited resources
   • Price controls
   • High inflation

6. A government spends £1 billion building roads instead of hospitals. What economic concept describes the lost hospital spending?

   • Productive efficiency
   • Opportunity cost
   • Fiscal deficit
   • Market failure

7. What fundamental condition causes scarcity to exist in any economy?

   • Excess supply
   • Unlimited wants
   • Trade deficits
   • High taxation

8. A farmer grows wheat instead of barley worth £800. What is the opportunity cost of growing wheat?

   • £800 of barley
   • £800 of wheat
   • Zero
   • £1,600 of crop

9. What causes a household with a £30,000 income to experience the problem of scarcity?

   • High savings
   • Limited income
   • Falling prices
   • Unlimited resources

10. Why does every economic choice incur an opportunity cost?

    • Prices constantly rise
    • Taxes are levied
    • Resources are scarce
    • Markets fail frequently

11. A council spends £5 million building a leisure centre instead of a library. What is the opportunity cost?

    • The leisure centre
    • £5 million cash
    • The lost library
    • Future tax revenue

12. Why does economic growth fail to eliminate the fundamental problem of scarcity?

    • Prices remain constant
    • Wants remain unlimited
    • Growth reduces output
    • Resources are infinite

13. What process determines how scarce resources are distributed among competing uses?

    • Inflation targeting
    • Economic growth
    • Specialisation
    • Resource allocation

14. A government chooses between funding education or funding defence. Which concept compares these choices?

    • Price elasticity
    • Economies of scale
    • Opportunity cost
    • Monetary policy

15. What non-monetary opportunity cost does a worker incur when choosing to work overtime?

    • Travel expenses
    • Lost leisure time
    • Income tax paid
    • Overtime pay rate

16. What condition ensures that opportunity cost is always present in economic decisions?

    • Price inflation
    • Resource scarcity
    • Market equilibrium
    • Government intervention

17. A firm uses its factory to produce cars. What represents the opportunity cost of this factory?

    • Car sales revenue
    • Total wage bill
    • Factory building cost
    • Best alternative output

18. Why is choosing the lowest monetary cost option not always economically optimal?

    • Ignores non-monetary costs
    • Ignores market demand
    • Causes high inflation
    • Eliminates economic scarcity

19. What combines with finite resources to create the fundamental economic problem in all societies?

    • Unlimited wants
    • High inflation
    • Market failure
    • Excess supply

20. Which economic concept describes a situation where finite resources cannot satisfy unlimited human wants?

    • Productivity
    • Inflation
    • Deflation
    • Scarcity

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