ECON Basics

Scarcity causes which of the following phenomenons

• individuals are required to constantly make choices about how to use their resources

• people lose all of their money

• people receive a lot of money at one time and become wealthy

• individuals are inconsistently using cost to determine which factors of production they need to make money

What is the term for the next best alternative when making a choice?

• opportunity cost

• fixed cost

• scarcity

• marginal cost

Who makes economic decisions in a market economy?

• sellers

• buyers and sellers

• buyers

• government

 Bart has decided to buy some water balloons rather than get an extra milk at lunch. Choosing among economic alternatives is referred to as

• Scarcity
• Trade - Off
• Interdependence

Incentives are ______________

• A set of external motivators that help people make choices.

• Whatever you are giving up to do something.

• The tension caused by infinite wants and finite resources.

• The study of production, employment, prices, and policies on a nationwide scale

You want to buy a new video game and a new pair of sneakers. You only have enough money to buy one of them. If you buy the video game, what is your trade-off?

• The money you spend on the video game
• The video game
• The sneakers

Which do people compare in order to make choices?

• Costs & Benefits
• Supply & Demand
• Buying & Selling
• Apples & Oranges

An incentive is something that...

• you get from a junkyard
• you need when you open a bank account
• motivates you to do something
• you find on a spaceship

Which statement explains scarcity?

• There's enough of everything for everybody
• As long as you have money, you can get anything you want.
• People always find more resources.
• People's wants are unlimited, but resources are limited.

I only have an hour of free time today. If I study, I can't see my friends.

• Costs versus Benefits
• Scarcity Forces Tradeoffs
• Incentives Matter
• Future Consequences Count