Economics Quiz Unit 1 Part 1

What is the definition of Economics?

• The study of how individuals manage their personal finances

• The study of how societies allocate scarce resources and makes decisions to fulfill unlimited wants

• The study of how governments regulate markets

• The study of how businesses maximize profits

What is Micro Economics and Macro Economics?

• Microeconomics focuses on individual markets, while macroeconomics examines the economy as a whole

• Microeconomics studies individual consumer behavior, while macroeconomics focuses on government policies

• Microeconomics analyzes small businesses, while macroeconomics studies multinational corporations

• Microeconomics deals with household budgets, while macroeconomics focuses on international trade

What is Scarcity?

• The situation where resources are plentiful and freely available

• The condition where human wants exceed the resources available to satisfy them

• The equilibrium point where supply equals demand in the market

• The state of overproduction leading to surplus goods

What are three Economic Questions every society must answer?

• i) What to produce? ii) How to produce? iii) For whom to produce?

• i) How much to produce? ii) When to produce? iii) Where to produce?

• i) Who will produce? ii) Who will consume? iii) Who will distribute?

• i) Why produce? ii) When to sell? iii) What to invest in?

What are the differences between needs and wants?

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

• Needs are unlimited, while wants are limited.

• Needs are determined by societal norms, while wants are individual preferences.

• Needs can be fulfilled without any cost, while wants require monetary exchange.

What are the differences between goods and services?

• Goods are tangible products, while services are intangible activities performed for a fee.

• Goods are produced by businesses, while services are provided by governments.

• Goods have a longer lifespan than services.

• Goods are perishable, while services are durable.

Write one example of a tradeoff.

What is Utility? What is price?

• Utility refers to the satisfaction or usefulness derived from consuming a good or service, while price is the monetary worth of that good or service

• Utility is the amount of labor required to produce a good or service, while price is the subjective perception of its quality

• Utility measures the scarcity of a resource, while price determines its market price

• Utility is the opportunity cost of consuming a good or service, while value is the total revenue generated from its sale

What is a shortage?

• A situation where demand for a good or service exceeds its supply at the current price

• An excess of goods or services in the market leading to a decrease in prices

• The condition where production costs outweigh the benefits of producing a good or service

• A scenario where resources are allocated efficiently to meet society's needs

What is an entrepreneur?

• A government official responsible for regulating business activities

• An individual who owns shares in a corporation

• Someone who organizes and operates a business, taking on financial risks in the hope of profit

• A worker who specializes in manufacturing goods through manual labor