Business Economics Final Exam | Multiple Choice
Questions & Verified Answers | Latest 2025/2026
Define economics, economic problem and scarcity correct answers
ECONOMICS correct answers The study of how people and society use resources to
satisfy their needs and wants.
ECONOMIC PROBLEM correct answers People have limited resources yet unlimited
wants so we must make choices
SCARCITY correct answers The management of resources is due to the economic
problem stated of having unlimited wants but limited resources. This is known as
economic scarcity.
• Discuss real world examples of the economic problem, market and scarcity correct
answers
ECONOMIC PROBLEM correct answers Want a pool not enough land
Want to build a house not enough workers (labor)
SCARCITY correct answers Limited resource of water/ don't have a clean water supply
- water scarcity
Over fishing - scarcity of a type of fish
MARKET correct answers want to buy a share in k-mart
want to buy a house
need an accountant
• Describe the operation of the labour, housing, stock and foreign exchange market
correct answers
LABOUR correct answers Workers sell their effort, skills and knowledge to an employer
in return for a wage
HOUSING correct answers Where houses are bought, and sold to satisfy the basic
need for shelter. Houses can be bought, then leased out to a tenant for rent, so that the
owner (landlord) makes a profit. Many people take out a loan from the bank to pay for
the house that the pay back over a 30yr period. The bank makes a profit by charging
people interest on the money it lends them.
, STOCK correct answers Shares (part ownership of a company) are bought and sold.
Shares entitle the shareholders to a portion of the company's profit. (dividends)
FOREIGN EXCHANGE correct answers Where different currencies from around the
world are bought, and sold. Some people and businesses will trade currencies so that
they can make purchases or other payments in other nations using the local currency.
• Define circular flow model, interdependence, households and business sector. correct
answers
CIRCULAR FLOW MODEL correct answers Illustrates the interdependent relationship
between businesses and consumers within the economy.
INTERDEPENDENCE correct answers The way different sectors within an economy
rely on each other. E.G. the firms cannot make goods and services without resources
from the households.
HOUSEHOLD SECTOR correct answers The people who work for businesses in return
for a wage or income, which they then use to buy goods and services from other
businesses. Due to this, money, goods and services keep flowing through the economy.
This satisfies the needs and wants or consumers.
BUSINESS SECTOR correct answers Producers are responsible for making and selling
goods and services. They aim to make a profit by selling items for a higher price than
the price of production. They need a variety of resources to produce goods and
services.
• Define the law of demand and demand correct answers
LAW OF DEMAND correct answers As the price of a good or service increases, the
demand decreases and vice versa.
DEMAND correct answers The amount of a good or service consumers are willing to
buy at a particular price
• Define the law of supply and supply correct answers
LAW OF SUPPLY correct answers As the price of a good or service increases, the
supply increases and vice versa.
SUPPLY correct answers The amount of a good or service producers are willing to
supply at a particular price at a given time.
• Plot demand and supply on the same graph correct answers Refer to notes and
graphing sheets
Questions & Verified Answers | Latest 2025/2026
Define economics, economic problem and scarcity correct answers
ECONOMICS correct answers The study of how people and society use resources to
satisfy their needs and wants.
ECONOMIC PROBLEM correct answers People have limited resources yet unlimited
wants so we must make choices
SCARCITY correct answers The management of resources is due to the economic
problem stated of having unlimited wants but limited resources. This is known as
economic scarcity.
• Discuss real world examples of the economic problem, market and scarcity correct
answers
ECONOMIC PROBLEM correct answers Want a pool not enough land
Want to build a house not enough workers (labor)
SCARCITY correct answers Limited resource of water/ don't have a clean water supply
- water scarcity
Over fishing - scarcity of a type of fish
MARKET correct answers want to buy a share in k-mart
want to buy a house
need an accountant
• Describe the operation of the labour, housing, stock and foreign exchange market
correct answers
LABOUR correct answers Workers sell their effort, skills and knowledge to an employer
in return for a wage
HOUSING correct answers Where houses are bought, and sold to satisfy the basic
need for shelter. Houses can be bought, then leased out to a tenant for rent, so that the
owner (landlord) makes a profit. Many people take out a loan from the bank to pay for
the house that the pay back over a 30yr period. The bank makes a profit by charging
people interest on the money it lends them.
, STOCK correct answers Shares (part ownership of a company) are bought and sold.
Shares entitle the shareholders to a portion of the company's profit. (dividends)
FOREIGN EXCHANGE correct answers Where different currencies from around the
world are bought, and sold. Some people and businesses will trade currencies so that
they can make purchases or other payments in other nations using the local currency.
• Define circular flow model, interdependence, households and business sector. correct
answers
CIRCULAR FLOW MODEL correct answers Illustrates the interdependent relationship
between businesses and consumers within the economy.
INTERDEPENDENCE correct answers The way different sectors within an economy
rely on each other. E.G. the firms cannot make goods and services without resources
from the households.
HOUSEHOLD SECTOR correct answers The people who work for businesses in return
for a wage or income, which they then use to buy goods and services from other
businesses. Due to this, money, goods and services keep flowing through the economy.
This satisfies the needs and wants or consumers.
BUSINESS SECTOR correct answers Producers are responsible for making and selling
goods and services. They aim to make a profit by selling items for a higher price than
the price of production. They need a variety of resources to produce goods and
services.
• Define the law of demand and demand correct answers
LAW OF DEMAND correct answers As the price of a good or service increases, the
demand decreases and vice versa.
DEMAND correct answers The amount of a good or service consumers are willing to
buy at a particular price
• Define the law of supply and supply correct answers
LAW OF SUPPLY correct answers As the price of a good or service increases, the
supply increases and vice versa.
SUPPLY correct answers The amount of a good or service producers are willing to
supply at a particular price at a given time.
• Plot demand and supply on the same graph correct answers Refer to notes and
graphing sheets
