What is scarcity?

• The desire for unlimited goods

• The condition where there are not enough resources to satisfy all wants

• The abundance of natural resources

• A situation where resources are evenly distributed

Which of the following is NOT a factor of production?

• Land

• Labor

• Money

• Capital

What is opportunity cost?

• The cost of producing more goods

• The next best alternative foregone when a decision is made

• The total cost of resources used

• The amount of money spent on a good

What is the law of demand?

• As the price of a good decreases, quantity demanded increases

• As the price of a good increases, quantity demanded increases

• Income changes do not affect demand

• Demand decreases when consumer income rises

Which type of good sees demand increase as income rises?

• Inferior goods

• Normal goods

• Substitutes

• Complements

If the price of a substitute increases, the demand for a good will:

• Increase

• Decrease

• Remain constant

• Be unaffected

The Law of Supply states:

• Price and quantity supplied are inversely related

• Price and quantity supplied are directly related

• There is no relationship between price and quantity supplied

• Supply decreases as demand increases

What happens to supply if production costs decrease?

• Supply increases

• Supply decreases

• Supply remains constant

• Supply becomes elastic

What is consumer surplus?

• The difference between the price consumers pay and the supply curve

• The difference between what consumers are willing to pay and what they actually pay

• The profit made by producers

• The difference between demand and supply at equilibrium

What happens to total utility when marginal utility is zero?

• Total utility increases

• Total utility stays the same

• Total utility decreases

• Total utility becomes negative