Understanding Scarcity and Choice

What is the basic economic problem that arises because resources are limited?

• Inflation

• Scarcity

• Unemployment

• Monopoly

Which of the following best describes opportunity cost?

• The total cost of producing goods

• The cost of the next best alternative foregone

• The cost of all available alternatives

• The cost of resources used in production

If a student decides to spend an hour studying instead of watching a film, what is the opportunity cost of studying?

• The knowledge gained from studying

• The enjoyment of watching the film

• The cost of the film ticket

• The time spent studying

Which of the following is an example of a scarce resource?

• Air

• Water in a desert

• Sand on a beach

• Sunlight

How does scarcity affect economic choices?

• It forces individuals to make choices about how to allocate resources

• It eliminates the need for budgeting

• It allows unlimited consumption of goods

• It reduces the need for trade-offs

What is the opportunity cost of choosing to produce more of one good over another?

• The additional profit gained

• The loss of potential gain from other alternatives

• The cost of raw materials

• The increase in production efficiency

Which of the following statements is true about scarcity?

• Scarcity only affects poor countries

• Scarcity is a problem only for consumers

• Scarcity affects all economies, regardless of wealth

• Scarcity can be completely eliminated with technology

If a country decides to produce more military goods, what is the opportunity cost?

• Increased national security

• Reduced production of consumer goods

• Higher employment rates

• Lower taxes

Which of the following is NOT a result of scarcity?

• The need for choice

• Unlimited resources

• Opportunity cost

• Trade-offs

In economics, what does the term "trade-off" refer to?

• The exchange of goods and services

• The decision to give up one thing in order to gain another

• The reduction of costs in production

• The increase in consumer satisfaction