20.2
Exercise
Learning pathways LEVEL1 1, 7, 9
LEVEL2
LEVEL3
2, 3, 5, 8
4, 6, 10
REMEMBER AND UNDERSTAND 1. What is the primary reason resources are considered limited in economics? A. They are evenly distributed among all countries. B. They can be used for multiple purposes simultaneously. C. They are finite and cannot meet all human wants. D. They are renewable and always available. 2. Which of the following best defines ‘opportunity cost’? A. The monetary cost of a good or service B. The time taken to make a decision C. The value of the next best alternative foregone D. The total cost of all alternatives 3. Entrepreneurship is important in an economy because it: A. discourages competition. B. reduces the need for innovation. C. drives economic growth and job creation. D. eliminates the role of government in business. 4. Businesses typically respond to changes in consumer preferences by: A. maintaining their current product lines. B. reducing production to cut costs. C. adapting products and services to meet new demands. D. increasing prices to deter demand. 5. Australia’s interaction with the global economy, especially Asia, is significant because: A. it leads to isolation from other markets. B. it limits opportunities for local businesses. C. it enhances trade relationships and economic growth. D. it reduces the need for domestic production. ANALYSE AND APPLY 6. Define ‘resource allocation’ and explain why it is a fundamental concept in economics. 7. Give an example of when a consumer has to make a choice. Why is this called an opportunity cost? 8. List two factors that can influence a business’s decision-making process. 9. Explain how being financially smart can benefit an individual in the long term. 10. Discuss one way in which Australia’s engagement with Asian economies can impact local businesses. Answers and sample responses for this topic are available online.
TOPIC20 Economics and Business concepts and skills 591
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