Understanding Basic Economics Concepts

Which of the following best defines economics? A) The study of how money is created and circulated. B) The study of how people choose to use limited resources to satisfy unlimited wants. C) The study of the distribution of wealth within a country. D) The study of how individuals save money.

• B) The study of how people choose to use limited resources to satisfy unlimited wants.

• The study of how to invest in the stock market.

• The study of how governments control inflation.

• The study of consumer behavior in retail stores.

What is the definition of goods in economics? A) Items that satisfy human wants and provide utility. B) Services provided by individuals or firms. C) Anything that can neither be seen nor touched. D) Actions that directly fulfill consumer desires.

• F) Physical objects that cannot be used.

• A) Items that satisfy human wants and provide utility.

• G) Intangible benefits that do not affect consumption.

• E) Items that are always free of charge.

Which of the following is NOT a characteristic of goods? A) Goods are tangible. B) Goods are produced and consumed simultaneously. C) Goods can be stored. D) Goods can be transferred from one place to another.

• A) Goods are always perishable.

• C) Goods cannot be produced in advance.

• D) Goods are intangible services.

• B) Goods are produced and consumed simultaneously.

Microeconomics primarily focuses on which of the following? A) The economy as a whole. B) Individual consumers and businesses. C) International trade. D) Government policies.

• E) National economic policies.

• F) Global market trends.

• B) Individual consumers and businesses.

• G) Historical economic events.

What is the primary focus of macroeconomics? A) Individual market behavior. B) Overall economic performance and policies. C) Consumer choices. D) Production processes.

• E) International trade agreements.

• F) Local business regulations.

• B) Overall economic performance and policies.

• G) Stock market fluctuations.

Which of the following is an example of a service? A) A car. B) A haircut. C) A book. D) A smartphone.

• A) A bicycle.

• B) A haircut.

• C) A magazine.

• D) A tablet.

What does the term 'opportunity cost' refer to? A) The cost of producing goods. B) The value of the next best alternative foregone. C) The total cost of all resources used. D) The price of a good in the market.

• G) The total revenue generated from sales.

• F) The price difference between two goods.

• B) The value of the next best alternative foregone.

• E) The cost of marketing a product.

In economics, what is meant by 'scarcity'? A) The abundance of resources. B) The limited nature of resources compared to wants. C) The distribution of wealth. D) The availability of goods in the market.

• E) The infinite supply of resources.

• G) The fluctuation of prices in the market.

• F) The equal distribution of resources among all individuals.

• B) The limited nature of resources compared to wants.

What is a market economy? A) An economy where the government makes all decisions. B) An economy based on supply and demand. C) An economy that relies on barter. D) An economy with no competition.

• An economy that only uses digital currency.

• An economy where prices are fixed by the government.

• B

• An economy that is entirely self-sufficient.

Which of the following best describes a 'public good'? A) A good that is sold in the market. B) A good that is non-excludable and non-rivalrous. C) A good that is only available to certain individuals. D) A good that is produced by private firms.

• A good that is exclusively provided by the government.

• B) A good that is non-excludable and non-rivalrous.

• A good that can be consumed by one person only.

• A good that is always free of charge.