Basic Economic Problems and Economic Systems Quiz

What is the fundamental economic problem that any human society faces?

• Abundance

• Inequality

• Scarcity

• Surplus

What does scarcity refer to?

• Excess supply

• Shortage of goods

• Limited resources relative to unlimited wants

• Unlimited resources

What is opportunity cost?

• The cost of production

• The value of the next best alternative that must be sacrificed

• The total cost of goods

• The price of a product

What does the Production Possibilities Frontier (PPF) illustrate?

• The maximum combinations of two goods that can be produced

• The distribution of resources

• The relationship between supply and demand

• The total economic output of a country

What is one condition that can lead to economic growth?

• Increase in the quantity and quality of economic resources

• Decrease in population

• Reduction in technology

• Decrease in consumer demand

Which of the following is a basic economic question?

• What to produce?

• How to invest?

• When to produce?

• Where to sell?

What type of economy is characterized by private ownership of resources?

• Command Economy

• Capitalist Economy

• Mixed Economy

• Traditional Economy

In a command economy, what is primarily controlled by the government?

• Private businesses

• Market prices

• Centralized planning and government control

• Consumer choices

What is a feature of a mixed economy?

• No market competition

• Total absence of regulations

• Combination of private and public ownership

• Complete government control

What does the law of increasing opportunity cost state?

• Opportunity cost decreases as production increases

• Opportunity cost remains constant

• Opportunity cost increases as more of one good is produced

• Opportunity cost is irrelevant in production