First Term Mid Term Test Economics SS 1 First Term Lesson Notes Week

Mid-Term Assessment: Economics SS 1 First Term

Part A: Objective Questions

Provide 20 fill-in-the-blank questions with options (a, b, c, d) based on the topics covered during the mid-term.

1. The ________ is the study of how individuals, businesses, and governments make choices in using limited resources.
   a) Sociology
   b) Economics
   c) Psychology
   d) Political Science
2. ________ is the inability to satisfy all human wants due to limited resources.
   a) Scarcity
   b) Want
   c) Choice
   d) Supply
3. The law of demand states that as the price of a good rises, the quantity demanded will ________.
   a) Increase
   b) Stay the same
   c) Decrease
   d) Double
4. The ________ of production refers to the size or level at which production takes place in a business.
   a) Economy
   b) Scale
   c) Resource
   d) System
5. ________ economies occur within a firm as it increases in size, leading to reduced per-unit costs.
   a) Internal
   b) External
   c) Financial
   d) Market
6. ________ refers to the physical and human resources required to produce goods and services.
   a) Capital
   b) Land
   c) Labor
   d) Enterprise
7. The reward for land is called ________.
   a) Rent
   b) Wages
   c) Interest
   d) Profit
8. A ________ curve shows the relationship between the price of a good and the quantity demanded at that price.
   a) Supply
   b) Cost
   c) Demand
   d) Production
9. In economics, a ________ occurs when a company faces increased costs due to growing too large.
   a) Economies of scale
   b) Diseconomies of scale
   c) Market failure
   d) Price floor
10. ________ economies arise outside a firm but benefit it, such as better infrastructure.
    a) External
    b) Internal
    c) Managerial
    d) Marketing
11. The law of supply states that as the price of a good increases, the quantity supplied will ________.
    a) Increase
    b) Decrease
    c) Stay constant
    d) Stabilize
12. The opportunity cost of a choice is the ________ alternative foregone.
    a) Best
    b) First
    c) Least expensive
    d) Next best
13. ________ of production refers to the efforts of individuals working to produce goods and services.
    a) Capital
    b) Land
    c) Labor
    d) Enterprise
14. The ________ is a graphical representation of the different combinations of two goods that can be produced with available resources.
    a) Production possibilities frontier
    b) Supply curve
    c) Demand curve
    d) Consumer price index
15. A ________ is the reward or payment for the services of capital in production.
    a) Rent
    b) Profit
    c) Interest
    d) Wages
16. ________ is the study of how resources are allocated to satisfy human wants and needs.
    a) Economics
    b) Business
    c) Marketing
    d) Sociology
17. The scale of production can lead to ________ when a firm produces at too large a scale, resulting in inefficiencies.
    a) Economies of scale
    b) Diseconomies of scale
    c) Equalization of resources
    d) Market equilibrium
18. The ________ means that consumers have to make choices due to limited resources.
    a) Scale of production
    b) Law of demand
    c) Concept of scarcity
    d) Law of supply
19. The main objective of the price system is to ________ the allocation of scarce resources.
    a) Regulate
    b) Change
    c) Equalize
    d) Adjust
20. ________ specialization occurs when a worker performs a single task repeatedly.
    a) Generalized
    b) Task-based
    c) Division of labor
    d) Collaborative

Part B: Theory Questions

Include 20 short answer questions covering the key concepts from the mid-term topics.

1. Define economics and explain its scope.
2. Explain the concept of scarcity and its relation to economics.
3. Discuss the law of demand and provide an example.
4. What are the factors that affect demand?
5. Describe the difference between demand and supply.
6. What is the law of supply, and how does it relate to price?
7. What are economies of scale? Explain internal and external economies of scale.
8. Define diseconomies of scale and give examples of how they affect businesses.
9. What are the factors of production? Explain each factor.
10. Discuss the concept of opportunity cost and provide a real-life example.
11. Explain the importance of the price system in an economy.
12. Define and explain the concept of specialization in production.
13. What is the production possibility frontier, and how does it relate to scarcity?
14. Discuss the rewards for the factors of production: land, labor, capital, and entrepreneurship.
15. Explain the difference between microeconomics and macroeconomics.
16. What are the main objectives of economics as a science?
17. Describe the classification of internal economies of scale.
18. What are the advantages and disadvantages of division of labor?
19. How do market forces determine equilibrium price?
20. Define opportunity cost and explain its importance in decision-making.

Part C: True or False Questions

Create 20 True or False statements related to the topics covered in the mid-term.

1. Scarcity refers to the unlimited availability of resources. (False)
2. The law of demand states that as the price of a good increases, demand decreases. (True)
3. Economies of scale can reduce per-unit costs as production increases. (True)
4. External economies of scale occur within a firm. (False)
5. Diseconomies of scale happen when businesses experience inefficiency as they grow larger. (True)
6. The reward for labor is called rent. (False)
7. A supply curve shows the relationship between price and quantity supplied. (True)
8. Opportunity cost is the cost of the best alternative forgone when a choice is made. (True)
9. All firms experience diseconomies of scale as they grow larger. (False)
10. Division of labor increases production efficiency. (True)
11. The price system helps to regulate the allocation of resources. (True)
12. The law of supply states that higher prices lead to lower quantities supplied. (False)
13. Internal economies of scale can include the use of specialized labor and technology. (True)
14. The reward for capital is called interest. (True)
15. The concept of scarcity is central to the study of economics. (True)
16. The concept of supply refers to the total amount of goods consumers are willing to purchase. (False)
17. The opportunity cost of a decision includes both monetary and non-monetary factors. (True)
18. The law of demand is always true regardless of price. (False)
19. The production possibility frontier shows the trade-off between two goods. (True)
20. Scale of production refers to the amount of resources available to a business. (False)

Part D: Fill-in-the-Gaps Questions

Develop 20 fill-in-the-blank questions without multiple-choice options.

1. ________ is the study of how individuals and societies allocate scarce resources to satisfy their wants.
2. The law of ________ states that as the price of a good rises, the quantity demanded falls.
3. ________ economies of scale happen when a firm grows and benefits from reducing the per-unit cost of production.
4. ________ of production refers to the efforts used to produce goods and services.
5. The ________ curve shows how the quantity supplied varies with changes in price.
6. The ________ is the reward for land in the production process.
7. ________ of scale occurs when larger firms face higher costs due to inefficiency.
8. The concept of ________ involves choosing between alternatives based on their value.
9. ________ of labor occurs when workers specialize in a single task to increase productivity.
10. The main goal of the ________ system is to allocate resources efficiently.
11. ________ of scale refers to the size of production in relation to the level of output.
12. The ________ curve reflects the relationship between the price of a good and the quantity demanded.
13. ________ is the reward for capital used in production.
14. The opportunity cost of a decision is the value of the ________ best alternative forgone.
15. ________ is the process by which resources are distributed among producers and consumers.
16. ________ is the study of larger economic factors like inflation and unemployment.
17. The production possibilities ________ shows the maximum combination of goods that can be produced with available resources.
18. ________ economies of scale occur when industries grow, benefiting all firms in the area.
19. A firm can achieve ________ of scale by using more advanced technology and machinery.
20. The reward for entrepreneurship is called ________.