Microeconomics Quiz

What is the fundamental concept in economics that states there are not enough resources to satisfy all our needs and wants?

• Excess

• Abundance

• Scarcity

• Surplus

Answer explanation

Scarcity is the fundamental concept in economics that states there are not enough resources to satisfy all our needs and wants.

What is the value of the next best alternative called in economics?

• Alternative Value

• Trade-off

• Benefit Cost

• Opportunity Cost

Answer explanation

The value of the next best alternative in economics is called Opportunity Cost.

In economics, what does the law of increasing opportunity cost state?

• The cost of production decreases as more units are produced

• The cost of production remains constant regardless of the units produced

• The cost of production increases as more units are produced

• The cost of production is not related to the units produced

Answer explanation

The cost of production increases as more units are produced

What is the economic model that shows the production of two goods or services an economy can produce given the factors of production and available technology?

• Production Possibilities Frontier

• Circular Flow Model

• Supply and Demand Model

• Market Structure Model

Answer explanation

The economic model that shows the production of two goods or services an economy can produce given the factors of production and available technology is the Production Possibilities Frontier.

What is the term used in economics to describe thinking about consuming or producing a little more or a little less of a certain good or service?

• Marginal Thinking

• Incremental Thinking

• Optimal Thinking

• Rational Thinking

Answer explanation

Marginal Thinking is the term used in economics to describe thinking about consuming or producing a little more or a little less of a certain good or service.

What is the concept in economics that helps understand the relationship between two or more factors through visual representation?

• Regression Analysis

• Statistical Analysis

• Graphical Analysis

• Equilibrium Analysis

Answer explanation

Graphical Analysis is the concept in economics that helps understand the relationship between two or more factors through visual representation.

In economics, what is the term used to describe the restriction that variables remain constant when building models and testing theories?

• Modus Operandi

• Ceteris Paribus

• Status Quo

• Tabula Rasa

Answer explanation

In economics, the term used to describe the restriction that variables remain constant when building models and testing theories is 'Ceteris Paribus'.

Which economic model illustrates the interactions between households and firms in the goods and services market and the labor market?

• Supply and Demand Model

• Circular Flow Model

• Production Possibilities Frontier

• Market Structure Model

Answer explanation

The Circular Flow Model illustrates the interactions between households and firms in the goods and services market and the labor market.

What is the term used in economics to describe the value of the next best alternative when making a choice?

• Alternative Value

• Benefit Cost

• Trade-off

• Opportunity Cost

Answer explanation

The term used in economics to describe the value of the next best alternative when making a choice is called Opportunity Cost.

Which economic concept helps individuals make better decisions about how to use their time and money?

• Scarcity

• Budget Constraint

• Opportunity Cost

• Marginal Thinking

Answer explanation

Opportunity Cost is the economic concept that helps individuals make better decisions about how to use their time and money by considering the value of the next best alternative foregone.