Economics 1.2 Quiz

What is the basic economic problem?

• Scarcity

• Demand

• Abundance

• Choice

Differentiate between needs and wants.

• Needs are temporary, while wants are permanent.

• Needs are universal, while wants are subjective.

• Needs are essential for survival, while wants are not necessary for survival.

• Needs are physical, while wants are emotional.

Define opportunity cost.

• The value of the chosen alternative

• The value of the next best alternative that is forgone when making a decision.

• The cost of a decision

• The cost of an opportunity

What are the factors of production?

• Money, resources, and technology.

• Supply, demand, and market.

• Land, labor, capital, and entrepreneurship

• Goods, services, and production.

Why is the basic economic problem also known as scarcity?

• Excessive availability of resources in relation to limited wants and needs.

• Equal availability of resources in relation to unlimited wants and needs.

• Unlimited availability of resources in relation to limited wants and needs.

• Limited availability of resources in relation to unlimited wants and needs.

Give an example of a need and a want.

• Food and a luxury car

• Shelter and a yacht.

• Water and a private jet.

• Clothing and a mansion.

Explain the concept of opportunity cost with an example.

• Opportunity cost is the value of the worst alternative that is forgone when a choice is made.

• Opportunity cost is the value of the last alternative that is forgone when a choice is made.

• Opportunity cost is the value of the most expensive alternative that is forgone when a choice is made.

• Opportunity cost is the value of the next best alternative that is forgone when a choice is made.

Name and describe the four factors of production.

• Land, labor, capital, and entrepreneurship

• Resources, workers, investment, and business acumen.

• Land, labor, money, and innovation.

• Soil, employees, wealth, and creativity.

What is the relationship between scarcity and opportunity cost?

• Scarcity has no impact on opportunity cost.

• Scarcity necessitates making choices, and the opportunity cost is the cost of the chosen option in terms of the foregone alternatives.

• Scarcity and opportunity cost are unrelated concepts.

• Opportunity cost is the result of abundance, not scarcity.

How do the factors of production contribute to economic growth?

• The factors of production have no impact on economic growth.

• The factors of production contribute to economic growth by providing the necessary resources for production.

• The factors of production contribute to economic growth by increasing demand.

• The factors of production hinder economic growth by creating scarcity.