Introduction to Economics Quiz

What is the definition of economics?

• The study of government policies

• The study of human behavior in relation to scarce resources

• The study of wealth distribution

• The study of environmental impacts

What does 'scarcity' refer to in economics?

• The lack of consumer demand

• Unlimited resources available

• Limited resources to satisfy unlimited wants

• The abundance of goods

What is opportunity cost?

• The cost of producing goods

• The cost of the next best alternative forgone

• The total cost of production

• The cost of labor

Which of the following is a basic economic problem?

• How to produce

• What to consume

• Where to save

• When to invest

What does the Production Possibility Frontier (PPF) illustrate?

• The cost of production

• The total production of a single good

• The maximum output possibilities for two goods

• The demand for goods in the market

In a capitalist economy, how is the problem of 'what to produce' typically solved?

• By consumer demand only

• By the price mechanism

• Through government planning

• Through random selection

Which economic system emphasizes public ownership of resources?

• Islamic Economy

• Mixed Economy

• Socialism

• Capitalism

What is a characteristic of capitalism?

• Central planning authority

• Limited government intervention

• Public ownership of resources

• Fixed prices by the government

What is one of the merits of socialism?

• Incentives for individual initiative

• Equal distribution of income

• High levels of competition

• Private ownership of resources

In a mixed economy, who decides what to produce?

• International organizations

• Both public and private sectors

• Only private enterprises

• Only the government