Basic Economics Quiz

Scarcity is best defined as:

• The cost of the next best decision regarding limitations of time and money.

• The fact that people have limited wants but unlimited resources.

• The fact that people have unlimited wants and limited resources.

• The opportunity cost of deciding between one tradeoff versus another.

Resources (factors of production) are:

• Scarce for households but plentiful for economies.

• Plentiful for households but scarce for economies.

• Scarce for households and scarce for economies.

• Plentiful for households and plentiful for economies.

• Owned by households and scarce for economies.

Any resources that are made by humans, such as machines, and are used to create other goods and services are called

• services.

• production.

• capital.

• labor.

Economics may best be defined as:

• the scientific study of supply and demand.

• the study of choices that are made with respect to a limited description of economic activities.

• the study of choices people make in light of their desire for unlimited wants but the reality of limited resources.

• a branch of sociology that examines the choice-making process in light of supply and demand.

The main reason why households and societies face many decisions is that

• resources are scarce.

• goods and services are not scarce.

• incomes fluctuate with business cycles.

• people, by nature, tend to disagree.

• wants are scarce.

Which of the following is the best definition of a need?

• The paradox of value.

• A synonym for a want.

• The trade-off considered when measuring opportunity cost.

• A fundamental necessity for life.

Which of the following would NOT be considered a factor of production?

• Trees used for making paper

• Bill Gates, who started Microsoft

• A worker at Wal-Mart

• An iPhone used for text messaging between you and your friend

A computer, smartphone, and projector are all goods used in a business. In economics, these are known as

• human capital

• financial capital

• physical capital

• consumer goods

Which of the following is an example of an entrepreneur?

• A writer who is hired by a film studio to adapt a novel into a screenplay.

• A lawyer in a high-profile law firm that specializes in business law.

• An Olympic ice skater who later decides to join a professional ice show.

• A computer engineer who starts their own social media company.

A rational decision-maker takes an action if and only if

• the marginal benefit exceeds the marginal cost

• the marginal costs exceed the marginal benefits

• the marginal cost of the action is zero

• the opportunity cost of the action is zero