The Basic Economic Problem

Which of the following relates to the concept of scarcity?

• Wants and needs are greater than the factors of production

• Scarcity of resources is the basic economic problem

• Scarcity necessitates opportunity costs

• All of the above

Which of the following BEST describe opportunity costs?

• The expense we incur from buying one thing instead of another

• The wasted opportunity of not choosing to do something

• The value of the next best alternative forgone

• The cost of choosing an action

Economic welfare ..

• ... is the concept of how well people are doing based on economic decisions

• ... is to do with the economics or war

• ... is achieved through the inefficient allocation of resources

• ... remains static whatever the allocation of resources

Ceteris Paribus means ...

• ... all things considered

• ... all other things being equal

• ... to hold price steady

• ... none of the above

What would cause an increase in the problem of scarcity?

• A reduction in resources

• A reduction in wants

• A rise in productivity

• A rise in the mobility of resources

What might be the opportunity cost of using a bus to transport children to school?

• Increasing the earning of the bus company

• Paying wages to the driver

• Paying for the cost of the petrol, oil or electricity used

• Transporting a group of retired people on a day out

Which form of air is an economic good?

• Air at ground level

• Air from an air-conditioning system

• Air above an ocean

• Air in a tropical rainforest