What is the law of supply and demand?

• It is an economic principle that establishes that the price of a good or service is determined by demand only

• It is an economic principle that establishes that the price of a good or service is determined by the supply and demand of a single market

• It is an economic principle that establishes that the price of a good or service is determined by the interaction between supply and demand.

• It is an economic principle that establishes that the price of a good or service is determined by supply only

What is the concept of opportunity cost?

• The opportunity cost is the benefit or value of the best option not chosen when making a decision.

• The opportunity cost is the value of the option not chosen when making a decision

• The opportunity cost is the cost of the chosen option divided by the benefit

• The opportunity cost is the price of the best chosen option

Explain the concept of production possibilities frontier.

• It is the graphical representation of the different combinations of goods and services that an economy cannot produce

• It is the graphical representation of the different combinations of goods and services that an economy can produce, given its resource and technology limitations.

• It is the graphical representation of the different combinations of goods and services that an economy chooses to produce

• It is the graphical representation of the different combinations of goods and services that an economy can produce, without resource and technology limitations

What is the circular flow of income in the economy?

• It is a model that shows how businesses and households interact through the markets for goods and services and the markets for factors of production.

• It is a model that shows how businesses and households interact through the financial markets

• It is a model that shows how businesses and households interact through the labor markets only

How does an increase in demand affect market equilibrium?

• Increases the price and quantity of equilibrium

• Decreases the price and quantity of equilibrium

• Increases the price but decreases the quantity of equilibrium

• Has no effect on the market equilibrium

What is the relationship between scarcity and choice?

• Scarcity of limited resources forces people to make decisions on how to allocate those resources.

• Scarcity has no relation to choice

• Choice is not influenced by scarcity

• Scarcity only affects production, not choice

What factors can shift the supply curve?

• Changes in production cost, technology, taxes and subsidies, and producer expectations

• Changes in market demand

• Variations in climate

• Consumer decisions

How is the opportunity cost of a good calculated?

• Adding the cost of production

• Comparing the benefit of the alternative option

• Subtracting the market value

• Dividing the price by the quantity produced

What does the equilibrium point represent in a supply and demand graph?

• The point at which supply and demand have no relationship.

• The point at which the quantity supplied is greater than the quantity demanded.

• The point at which the quantity demanded is greater than the quantity supplied.

• The point at which the quantity demanded is equal to the quantity supplied.

What is the impact of technology on the production possibilities frontier?

• Increases the production possibilities frontier by decreasing efficiency in the production of goods and services

• Reduces the production possibilities frontier by limiting the quantity of goods and services that can be produced

• Expands the production possibilities frontier by allowing the production of more goods and services with the same resources.

• No impact whatsoever