Basic Economics Concepts

Which of the following does Economics primarily study?

• how scarcity can be eliminated

• how firms manipulate prices

• how government influences resource allocation decisions

• the problem of scarce resources relative to human wants

Which of the following is one of the basic economic questions?

• What should we produce?

• How should things be produced?

• Who should things be produced for?

• All of the above?

What is allocation?

• The next best choice when you make a decision

• The consumers desire to buy a product

• The distribution of goods and services

• None of the above

Which of the above is a factor of production?

• Supply

• Demand

• Trade-offs

• Land

Opportunity cost is the next best choice when a decision is made.

• False

• True

What is the study of the behaviors of individuals within an economy?

• Macroeconomics

• Microeconomics

• Economics

Which of the following is an example of scarcity?

• Lack of orange juice because the trucks carrying it are on strike.

• Lack of grapefruit juice because very few people want to buy it.

• Lack of enough workers to finish two jobs because there’s a limited supply of workers.

• Lack of enough workers to work at night because the pay is too low.

What is a factory building an example of?

• Physical capital

• Human Capital

• An economic trade-off

• Technology

What is labor?

• Labor is representation of alternative ways to use an economy’s resources.

• Labor is actions or activities that one person performs for another.

• Labor is limited quantities of resources to meet unlimited needs or desires.

• Labor is the paid effort that people devote to a task.

Why are all goods and services scarce?

• Some services cost more than others.

• Some things are wants, and others are needs.

• All resources are scarce in comparison to wants.

• Some people want to have more goods than others.