Basic Economic Concepts

Front

Which of the following does Economics primarily study?
Options:
how scarcity can be eliminated,
how firms manipulate prices,
how government influences resource allocation decisions,
the problem of scarce resources relative to human wants

Back

the problem of scarce resources relative to human wants

Front

What is the opportunity cost of one video if songs cost $1.00 each and videos cost $2.00 each?

Back

It is constant and equal to 2 songs

Front

If you decide to study an extra hour tonight, what would be the economic outcome? Options: The marginal cost of studying an extra hour exceeds its marginal benefit. The marginal benefit of studying an extra hour exceeds its marginal cost. Studying harder will always improve your test scores. You will most likely get a lower than expected grade on your last exam.

Back

The marginal benefit of studying an extra hour exceeds its marginal cost.

Front

According to the production possibilities table, what is required as indicated by increasing production of capital goods?

Back

The increase in sacrifices of consumer goods.

Front

Consider the problem Marsha faces of how to allocate her weekly allowance between books and videos. How will an increase in Marsha's allowance affect her budget on a supply and demand curve?

Back

Shift her budget line to the right.

Front

What is best illustrated by the negative slope of the production possibilities curve?

Back

When resources are fully employed, an economy can produce more of one thing only by producing less of something else.

Front

What would a microeconomist most likely study?

Back

How consumers respond to a change in gasoline prices.

Front

Production of which of the points in the diagram is currently unattainable given the economy's resources? Options: Point A, Point B, Point C, Point D

Back

Point D

Front

What does the fundamental problem of economics imply?

Back

Individuals and communities must make choices among competing alternatives.

Front

Margaret decides to stay home and study for her exam rather than going out to a movie with her friends. Which of the following best reflects her dilemma?

Back

Opportunity cost