Instruction: Choose the best answer from the given alternatives.

1. The opportunity cost of producing an additional unit of good A can be defined as:
A. the money cost of the factors of production used in the production of good A.
B. the retail price of good A.
C. the cheapest method of producing good A.
D. what must be sacrificed of other goods to get the additional units of good A.

2. Positive and normative statements differ in that:
A. positive statements can be verified by referring to facts whereas normative statements cannot.
B. unlike normative statements, positive statements involve value judgment.
C. normative statements can be graphed whereas positive statements cannot.
D. normative statements can be verified by referring to facts whereas positive statements cannot.

3. The production possibility curve illustrates that:
A. constant opportunity costs always exist.
B. there are no opportunity costs in a wealthy economy.
C. society can always produce more of all goods simultaneously.
D. if a society is efficient, it can produce more of one good only if it reduces the production of another good.

4. Which one of the following is true about choice in economics?
A. It implies cost.
B. It arises as a result of shortage.
C. It arises as a result of unlimited output.
D. It arises as a result of the existence of free resources.

5. If you can either catch four fish in two hours or pick ten bananas in one hour, what is the opportunity cost of catching one fish?
A. 2 bananas
B. 5½ bananas
C. 10 bananas
D. 5 bananas

6. Which one of the following is an example of a positive economic statement?
A. Everybody should work hard to improve their living standard.
B. The new university president is better than the previous one.
C. It is better if schools introduce new extracurricular activities like helping orphans.
D. If the price of eggs increases, people tend to buy less, other things remaining the same.

7. Which of the following is a true statement about the production possibility frontier (PPF), which is concave to the origin?
A. Opportunity cost remains the same.
B. Opportunity cost always increases.
C. Opportunity cost always decreases.
D. None of the above.

8. The fundamental goal of economics is to:
A. make sure that everyone eats three times a day.
B. study the allocation of resources under scarcity.
C. learn how to redistribute income and eliminate poverty.
D. reduce unemployment so that lower welfare payments are necessary.

9. The statement, "if the tax on gasoline increases, gasoline consumption will decline" is an example of a:
A. positive statement
B. normative statement
C. conservative statement
D. macroeconomic statement