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Year 10 Economics Exam Revision

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  • How do firms decide the price of their products to make the most profit? Give an example of how supply and demand affect their choices.
    Answers will vary
  • In a market economy, how are prices primarily determined?
    By consumer needs
    By supply and demand
    By nonprofit organizations
    By government regulations
  • In a command economy, resource allocation is primarily decided by...
    The government
  • What type of economy prioritizes state ownership and central planning?
    Market economy
    Command economy
    Capitalist economy
    Mixed economy
  • What is an opportunity cost?
    Expenses of daily needs
    Price increase over time
    Cost of new opportunities
    Value of the next best alternative
  • In a market economy, who decides what goods are produced?
    Consumers and producers
  • The 2008 financial crisis led to government intervention in the form of...
    New minimum wage laws
    Bailouts
    Price caps
    Subsidies for small businesses
  • Which of these best describes economic scarcity?
    Abundant resources
    Limited resources vs. unlimited wants
    Financial savings
    Equal distribution of wealth
  • Which is a common cause of inflation?
    Low demand for goods
    Reduced taxes
    Increased imports
    Increased money supply
  • What are the potential ethical issues that firms may face when focusing solely on profit maximization? Use an example to illustrate your answer.
    Answers may vary - explore the balance between profit and social responsibility
  • Name one ethical issue raised by the actions of financial institutions during the 2008 crisis.
    Selling risky loans as low-risk investments to increase profits
  • What financial product played a key role in the 2008 crisis?
    Mortgage-backed securities
    Credit cards
    Car loans
    Savings bonds
  • What does deregulation in financial markets mean?
    Reducing government rules and oversight of financial institutions.
  • What is a major role of government in controlling inflation?
    Setting interest rates
    Increasing supply of goods
    Closing international trade
    Lowering wages
  • What is scarcity in economics?
    When there are limited resources to meet unlimited wants
  • How can governments use taxes to influence the economy?
    Increasing taxes can reduce spending, while lowering taxes can boost demand.
  • What is the primary focus of microeconomics?
    Decisions of individuals and businesses
  • What is a key purpose of government intervention in markets?
    Guarantees profits
    Decreases competition
    Ensures private ownership
    Protects against market failures
  • Macroeconomics primarily studies...
    National and global economies
  • How does inflation generally affect consumers?
    Reduces purchasing power
    No effect
    Increases purchasing power
    Makes goods cheaper
  • How did deregulation contribute to the 2008 financial crisis?
    Reduced global trade
    Increased government spending
    Lowered consumer spending
    Allowed riskier financial practices
  • What does inflation do to the purchasing power of money?
    It reduces purchasing power
  • Which group was partly responsible for inaccurate ratings of financial products in 2008?
    Real estate agents
    Credit rating agencies
    Federal Reserve
    Consumers
  • What is the relationship between supply and price in a market economy?
    When supply increases, price usually decreases, and vice versa
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