Economics Quiz

What is Economics?

• The study of how people make choices to satisfy their wants

• The study of governmental fiscal policies

• The study of historical financial trends

• The study of planetary resources

What is scarcity?

• The abundance of resources

• The limited nature of society's resources

• The unlimited wants of individuals

• The efficient distribution of resources

All resources are scarce.

• True

• False

Which of the following is not considered a factor of production?

• Land

• Labor

• Liquidity

• Capital

What is an opportunity cost?

When drawing a production possibilities curve, economists assume 90% efficiency.

• True

• False

On a production possibilities curve, all points under the curve are:

• Efficient

• Inefficient

• Unattainable

• The optimal production point

On a production possibilities curve, all points outside the curve are:

• Efficient

• Inefficient

• Unattainable

• The optimal production point

Which of the following is NOT one of the three questions that need to be answered by an economic system?

• What will we produce

• How will we produce it

• How will people pay for what we produce

• Who will get what we produce

In a free market system, who makes economic decisions?

• Individuals

• The Government

• Santa Claus

• Parents