Economics Concepts Quiz

What is the basic economic problem that arises because resources are limited while human wants are unlimited?

• Excess

• Overabundance

• Scarcity

• Abundance

In economics, what is the law of demand?

• The law of scarcity

• The law of demand states that, all else being equal, as the price of a good or service increases, the quantity demanded decreases, and vice versa.

• The law of supply

• The law of equilibrium

Which type of economic system is characterized by private ownership of resources and the means of production?

• Communism

• Feudalism

• Socialism

• Capitalism

What is the role of government in a market economy?

• Enforce property rights, regulate competition, provide public goods, address externalities, and stabilize the economy.

• Provide unlimited subsidies to all industries

• Ignore environmental concerns and focus solely on profit

• Eliminate all regulations and let businesses operate freely

What is the concept that refers to the condition of having unlimited wants and limited resources?

• Plenty

• Excessiveness

• Scarcity

• Abundance

Which economic indicator measures the total value of all goods and services produced in a country in a given year?

• Net Domestic Product (NDP)

• Gross National Product (GNP)

• Consumer Price Index (CPI)

• Gross Domestic Product (GDP)

What happens to the price of a good when there is excess supply in the market?

• The price of the good remains the same.

• The price of the good increases.

• The price of the good fluctuates.

• The price of the good decreases.

In a command economy, who makes decisions about what goods and services will be produced?

• Workers

• Consumers

• Government

• Businesses

What is the term used to describe the situation where people do not have enough resources to satisfy all their wants?

• abundance

• plenty

• excess

• scarcity

Which economic indicator measures the average change in prices of goods and services over time?

• Consumer Price Index (CPI)

• Unemployment Rate

• Gross Domestic Product (GDP)

• Producer Price Index (PPI)