Economics Terms Quiz

What does 'scarcity' mean in economics?

• An unlimited supply of resources

• The inability to create goods

• Limited resources and unlimited wants

• Excessive competition in markets

What happens when supply exceeds demand?

• Prices increase

• Prices decrease

• Scarcity occurs

• Economies of scale are achieved

What does 'competition' encourage businesses to do?

• Reduce their efficiency

• Lower their quality

• Offer better goods and services at competitive prices

• Stop hiring employees

A 'trade-off' occurs when you...

• Get something without giving anything in return

• Lose one benefit in exchange for another

• Avoid making decisions

• Increase profits without effort

What are 'economies of scale'?

• Savings achieved when production increases

• Losses due to inefficient processes

• Increased wages for employees

• A decrease in global trade

What is 'efficiency' in economics?

• Using resources to maximize output

• Producing goods regardless of cost

• Creating unlimited supply

• Avoiding competition

What are 'goods and services'?

• Only physical items people buy

• Tasks or products created to meet needs and wants

• Assets listed on a balance sheet

• Public-sector resources

What is 'elasticity' in economics?

• The ability of prices to stay constant

• How responsive supply or demand is to changes in price

• The flexibility of production processes

• The cost of producing goods

What does an 'incentive' do?

• Reduces supply

• Encourages specific actions

• Creates debt

• Stops competition

What does 'globalization' refer to?

• The integration of economies, cultures, and markets worldwide

• A decrease in international trade

• The reduction of global competition

• The collapse of local economies