Fundamental Economic Concepts

What is the basic economic problem?

• Opportunity Cost

• Scarcity

• Factors of production

• Goods and Services

Which of the following is one of the basic economic questions?

• What should we produce?

• How should things be produced?

• Who should things be produced for?

• All of the above?

What does the PPC/PPF illustrate?

• The basic economic questions

• opportunity cost

• regressive taxes

• business cycle

The higher you education, the higher your standard of living.

• True

• False

Which of these is a factor of production?

• Supply

• Demand

• Trade-offs

• Land

Opportunity cost is the next best choice when a decision is made.

• False

• True

Which point on the PPC is desirable but not attainable?

• A

• B

• D

• E

Which point is attainable but not desirable?

• C

• A

• D

• B

What can cause a shift to the right on a PPF?

• Less natural resources

• An increase in new technology

• Not using all available resources

• None of the above

What is an incentive for entrepreneurs?

• Profit motive

• The risk of losing all of their money