Unit 1 - Economics Practice Quiz

Economics is the study of...

• how individuals make decisions

• incentives and decision making.

• how governments create policies

What are "Incentives"?

• Positive or negative consequences that can influence decision making.

• The costs of producing goods and services

• The resources available to individuals and businesses

What does "Rationality" mean in the context of economics?

• Making decisions based on emotions and personal beliefs

• Making decisions based on logical reasoning and self-interest

• Making decisions based on social norms and cultural values

What does "Irrationality" mean in the context of economics?

• Making decisions based on logical reasoning and self-interest

• Making decisions based on emotions and personal beliefs

• Making decisions based on social norms and cultural values

What is the concept of "Expected Value"?

• The total value of all goods and services produced in a country in a given year

• The ability to produce a greater quantity of a good or service with the same amount of resources

• The value of the Potential Reward x Probability of Success.

What does it mean for a resource to be "Scarce"?

• There is an unlimited supply of the resource

• The resource is in limited supply relative to its demand

• The resource is available in abundance

What does it mean to "Allocate" resources?

• To use resources efficiently to meet people's wants and needs

• To distribute resources equally among individuals

• To save resources for future use

What is "Demand" in economics?

• The quantity of a good or service that consumers are willing and able to buy at a given price

• The quantity of a good or service that producers are willing and able to sell at a given price

• The price at which buyers and sellers agree to trade a good or service

What is "Supply" in economics?

• The quantity of a good or service that consumers are willing and able to buy at a given price

• The quantity of a good or service that producers are willing and able to sell at a given price

• The price at which buyers and sellers agree to trade a good or service

What is "Production" in economics?

• The process of consuming goods and services

• The process of allocating resources

• The process of creating goods and services