Unit 1 Scarcity and PPC Fall 23

Which of the following best describes economics?

• Study of social sciences

• Study of government spending and inflation

• Study of money and finance

• Study of scarcity and decision making

Which statement is true about the rising price of crude oil on world markets?

• It will have no impact on gas prices

• It will lead to a decrease in demand for gas

• It will lead to an increase in gas prices

• It will lead to a decrease in gas prices

What is the difference between microeconomics and macroeconomics?

• Microeconomics studies small economic units, while macroeconomics studies the economy as a whole

• Microeconomics studies individuals, while macroeconomics studies governments

• Microeconomics studies government spending, while macroeconomics studies economic growth

• Microeconomics studies the economy as a whole, while macroeconomics studies specific industries

Which of the following is NOT a key assumption of the Production Possibilities Curve?

• Full employment of resources

• Fixed resources

• Flexible technology

• Only two goods can be produced

What is the Law of Increasing Opportunity Cost?

• As you produce more of any good, the opportunity cost will decrease

• As you produce more of any good, the opportunity cost will fluctuate

• As you produce more of any good, the opportunity cost will increase

• As you produce more of any good, the opportunity cost will remain constant

Why are resources not easily adaptable to producing both goods?

• Scarcity

• Tradeoffs

• Fixed resources

• Flexible technology

Which of the following is NOT a concept that a production possibilities curve demonstrates?

• Scarcity

• Opportunity costs

• Demand and supply

• Tradeoffs

What is the purpose of a production possibilities curve?

• to make decisions about resource allocation

• to illustrate the relationship between scarcity and choices

• to determine the price and costs of goods

• to demonstrate the concept of diminishing returns

What is one of the key assumptions of a production possibilities curve?

• unlimited resources

• production of multiple goods

• flexible technology

• fixed resources

How is the production possibilities curve used in economics?

• to make predictions about future economic growth

• to determine the optimal level of production

• to analyze the impact of government policies the economy

• to illustrate economic concepts such as scarcity and opportunity costs