Explanation​:
Free goods are so plentiful that they incur no opportunity cost for production.

Choice D is not an example of a free good as there is an opportunity cost in providing free lunches to students, as tax revenue must be spent to provide it.

Choices A, B and C are incorrect as these goods are provided by nature and their provision incurs no opportunity cost.

Explanation​:
Statement I: scarcity is the fundamental problem of economics arising because humans have unlimited wants but resources to satisfy those wants are limited.

Statement II: efficiency requires that society use scarce resources to optimise benefits to society while minimising waste.

Statement III: sustainability means that present consumption should not compromise the needs of future generations.

Explanation​:
Statement I is true: import spending is money that flows out of the circular flow to other countries. Export revenue is money that flows into the circular flow from other countries

Statement II is true: investment spending is money that flows into the circular flow from the banking sector. Saving is money that flows out of the circular flow to the banking sector

Statement III is true: workers receive wages as the income for their labour

Statement IV is not true: interest is the income for capital as a factor of production. Profit is the income for entrepreneurship

Explanation​:

Choice D is correct as governments can run a budget deficit by borrowing to finance spending greater than tax revenue.

Choice A is not the answer, as profit$\text{—}$the payment to entrepreneurship$\text{—}$also flows to households.

Choice B is not the answer, as the payment to capital is interest.

Choice C is not the answer, as an open economy involves the foreign sector, meaning income will also be spent on foreign goods (exports)

Explanation​:
Positive statements describe how things are. An observer can verify these statements as true or false based on empirical data. Normative statements prescribe how things ought to be. They contain opinions or value judgments.

Choice A is descriptive. It describes what the government does. It does not express an opinion or value judgement.

Choices B, C, and D are normative statements. Each expresses an opinion or prescription of how things ought to be.

Explanation​:
The Marxist critique occurred in the 19th century when classical economic theory was forming and laissez-faire ideas were becoming more popular.

Choices A, C, and D are all changes in economic theory that occurred in the 20th century.

Explanation​:
The PPC shifts when the quantity or quality of the factors of production (FOP) improve.

A rise in labour productivity enhances the quality of labour, an FOP. This increases the potential output of the economy.

Choice A is wrong because a fall in unemployment means that some of an economy's resources—labour—are not fully employed.

The following choices decrease FOPs and the PPC shifts inward, not outward:

• (Choice B) A natural disaster would destroy a nation's capital.
• (Choice D) Migration would lessen the amount of available labour in a country.

Explanation​:
The four factors of production are land, labour, capital, and entrepreneurship.

Wild fish are considered a natural resource that can be extracted, like oil or coal, making it $\text{‘}$land$\text{’}$. An oven would be considered capital as it is equipment/a non-human and non-natural physical resource used in the production process.

Choice A is wrong as a manager is a human resource, making them labour.

Choices B and D are wrong as pesticides and tractors are human-made inputs, making them capital.

Explanation​:
The move from point X to point $A$ shows that the economy is diverting factors of production (FOP) away from producing producer goods, towards producing consumer goods.

Choices B and D are wrong as both would entail diverting FOP away from consumer goods.

Choice C is wrong because it occurs on a new PPC, which can only occur if the quantity or quality of FOP changes.

Explanation​:
In a free market economy, distribution of output depends on willingness and ability to pay, that is, consumer demand. Government officials decide how to distribute output in a planned economy, not a free market economy.

A mixed economy mixes features of both free market and planned economies, but government officials do not decide how to distribute all output.

Choices A, B, and C are features of a mixed economy.

Explanation​:
In free market economies, scarce resources are distributed based on the forces of supply and demand. However, in command/planned economies, government officials allocate scarce resources per the state's objectives.

Choices A and B are true of free market economies, not planned economies. We assume consumer choices determine what is produced, via the price mechanism.

Choice C is incorrect as the scarcity of resources is why choices have to be made in economies, not how those choices are made.

Explanation​:
Ceteris paribus means holding all other factors constant to analyse the relationship between two variables. It is a way of isolating the effect of one variable on another by assuming that all other factors remain unchanged.

Choice A is incorrect. The ceteris paribus assumption is a temporary assumption made for the purpose of analysis.

Choices C and D are incorrect. Ceteris paribus means that other variables are assumed to be unchanging, not unimportant.

Explanation​:
A shift of the PPC outwards is caused by an increase in the quantity of resources or an improvement in the quality of resources. A movement from one point inside the PPC (Point $A$) to a point closer to the PPC (Point $B$) is caused by reductions in unemployment or improvements in efficiency.

Choices A and B incorrectly attribute the causes of change in Figure 2.

Choice D mixes the causes of the changes in Figure 1 and 2.

Explanation​:
Choice D expresses an opinion or value judgment, making it a normative statement.

Choices A, B, and C are all concerned with quantifiable, measurable data that can be verified or refuted, which makes them positive statements.

Explanation​:
If injections increase, then national income will tend to increase, but it does not necessarily mean that leakages will tend to decrease. It is possible that both injections and leakages increase or decrease at the same time.

Choices A and B are true statements about the circular flow of income model: it shows interdependence because the flows of inputs, outputs, income, and expenditure contribute to each other. For example, income paid to households becomes expenditure on production.

Choice C is also true: if the sum of export revenue, government expenditure, and investment expenditure is smaller than that of import expenditure, taxes, and saving, then the value of national income will decrease.

Explanation​:
The circular economy emphasizes a more sustainable, regenerative and restorative approach: the focus is on refurbishing, repairing and remanufacturing, generating very little waste.

Choices B, C, and D are features of the $\text{‘}$linear economy', which uses a $\text{‘}$take-make-waste' approach. The linear economy presents challenges to sustainability.

Explanation​:
Value judgments are opinions, and they fall within the realm of normative economics. Normative economics refers to the areas of economics that are open to personal opinion and belief, and thus not subject to refutation.

Choices B, C, and D are all parts of the methodology of positive economics, which relies on facts and data that can be observed, measured, and verified.

Explanation​:
A is correct because utility refers to a consumer's satisfaction from consuming goods and services. This theory assumes consumers are rational, and they tend to buy goods and services that provide them with the highest degree of satisfaction.

The following choices are incorrect because they do not relate to consumer behaviour:

• Choice B refers to an assumption made about producers, profit maximisation.
• Choice C refers to government behaviour.

D is incorrect because it is a reason why consumers sometimes do not maximise utility.

Explanation​:
Say's law states that when firms supply products, households receive incomes for factors of production that they have sold to firms, creating demand for various products. Put another way, the supply of products provides income to households, creating demand for other products.

Choices A and B are incorrect as households do not buy every product produced; some remain unsold inventories that firms eventually phase out.

Choice D is incorrect as it assumes that if households buy a product, it becomes addictive.

Explanation​:

Leakages involve income earned that is not spent on domestic goods and services. Leakages include: saving, taxes, and import spending.

Export revenue is an injection into the circular flow, not a leakage.

Therefore, choices A, C, and D are incorrect because export revenue is an injection, not a leakage.