Economic Concepts Quiz

What is the fundamental economic problem?

• Scarcity of resources

• Abundance of resources

• Equal distribution of wealth

• Unlimited wants

What is the difference between wants and needs?

• Wants are essential, needs are not

• Needs are essential, wants are not

• Wants and needs are the same

• Needs are luxury items

What is the significance of opportunity cost?

• It measures the cost of a missed opportunity

• It is the cost of production

• It is the profit gained from an investment

• It is the total revenue of a company

What are the four factors of production?

• Land, labor, capital, entrepreneurship

• Money, time, effort, resources

• Goods, services, labor, capital

• Land, labor, goods, services

What is meant by the division of labor?

• Specialization of tasks

• Equal distribution of work

• Random assignment of tasks

• Centralized decision-making

What are the characteristics of a market economy?

• Government control, planned production

• Free market, supply and demand

• Central planning, fixed prices

• Mixed ownership, regulated prices

How are resources allocated in a mixed economy?

• Through government planning only

• Through market forces only

• Through a combination of market forces and government intervention

• Through random distribution

What is a production possibility curve (PPC)?

• A graph showing maximum possible output combinations

• A chart of company profits

• A diagram of supply and demand

• A list of production costs

How can a PPC be used in an economy?

• To show resource allocation

• To predict future profits

• To determine tax rates

• To set interest rates

What is the function of money?

• Medium of exchange

• Source of entertainment

• Tool for decoration

• Means of communication