Economic Concepts

What are the three basic economic questions that societies must answer?

• How to produce goods and services, who consumes goods and services, when to produce goods and services

• Where to produce goods and services, why produce goods and services, who sells goods and services

• What goods and services to produce, how to produce goods and services, who uses or consumes goods and services

• Which goods and services to produce, how to distribute goods and services, who produces goods and services

What are the three factors of production?

• Natural resources, machinery, and labor

• Goods, services, and capital

• Money, resources, and labor

• Land, labor, and capital

What is scarcity in economics?

• Having unlimited resources to meet limited wants

• Having limited resources to meet unlimited wants

• Having limited resources to meet limited wants

• Having unlimited resources to meet unlimited wants

What is opportunity cost in economics?

• The cost of labor

• The cost of production

• The cost of the product

• The cost of what you have to give up

What is demand in economics?

• The willingness to produce a good or service

• The cost of making one more unit of the product

• The price of a product

• The desire for a certain good or service

What is supply in economics?

• The price of a product

• The willingness to produce a good or service

• The cost of making one more unit of the product

• The desire for a certain good or service

What is the relationship between demand and price?

• If demand increases, price tends to rise

• If demand increases, price tends to fall

• If demand increases, price decreases

• If demand increases, price remains the same

What is the role of producers in an economy?

• Produce natural resources

• Consume goods or services

• Make and sell goods or services

• Buy goods and services

What is the incentive for producers to make and sell products or services?

• Desire to save money

• Desire to earn money

• Desire to produce goods

• Desire to consume goods

What does marginal cost represent for a producer?

• The cost of making one more unit of the product

• The cost of labor

• The cost of resources

• The cost of the product