EOC EOC Economics 3

Question 1

What is 'comparative advantage' in international trade?

Accepted Answer

Producing a good at a lower opportunity cost than another country

Answer

Comparative advantage means a country can produce a good at a lower opportunity cost relative to another country, making specialization and trade mutually beneficial.

Question 2

What economic concept explains why people must make choices due to unlimited wants and limited resources?

Accepted Answer

Scarcity

Answer

Scarcity is the fundamental economic problem that arises because human wants are unlimited while the resources available to satisfy them are finite.

Question 3

What is the difference between a 'recession' and a 'depression'?

Accepted Answer

A depression is longer and more severe than a recession

Answer

A recession is defined as two or more consecutive quarters of negative GDP growth, while a depression is a far more severe and prolonged economic downturn.

Question 4

Which factor of production refers to the human effort used to produce goods and services?

Accepted Answer

Labor

Answer

Labor is the human effort — both physical and mental — that goes into producing goods and services, and it is one of the four classical factors of production.

Question 5

What is a 'tariff' in the context of international trade?

Accepted Answer

A tax on imported goods

Answer

A tariff is a tax imposed by a government on goods imported from other countries, typically used to protect domestic industries or raise government revenue.

EOC - End-of-Course Test Practice Test

EOC - End-of-Course Test Practice Test

EOC EOC Economics 3