Introduction to Economics

What is the fundamental economic problem that all societies face?

• Abundance of resources
• Scarcity of resources
• Equal distribution of resources
• Unlimited resources

Which term refers to the value of the next best alternative that is forgone when a choice is made?

• Scarcity
• Opportunity cost
• Wants
• Needs

Which of the following is NOT a basic economic question?

• What to produce?
• How to produce?
• For whom to produce?
• When to produce?

Which of the following is an example of a need?

• Smartphone
• Shelter
• Designer clothing
• Vacation

In a traditional economy, economic decisions are primarily based on:

• Government directives
• Market forces
• Custom and tradition
• Consumer preferences

In a hypothetical country, the government is in control of resources and production, and everything is centrally planned. What type of economic system does this country follow?

• Market economy

• Traditional economy

• Command economy

• Mixed economy

In a supermarket, what primarily determines what products are stocked on the shelves?

• Consumer demand and supply

• Government directives

• Custom and tradition

• Central planning

Which economic system is characterized by private ownership of resources and competition in the marketplace?

• Capitalism
• Socialism
• Communism
• Mixed economy

In a command economy, who typically makes decisions about what and how much to produce?

• Private businesses
• Consumers
• Government authorities
• Market forces

Which of the following is a characteristic of a mixed economy?

• Private individuals control all resources and production
• Economic decisions are made based on custom and tradition
• Both the government and the private sector play a role in economic decision-making
• Central planning and government control dominate economic activities