Economics Quiz

What is economics?

• The study of how people satisfy unlimited needs with limited resources.

• The study of how to make money quickly.

• The study of ancient civilizations.

• The study of weather patterns.

Societies are faced with which three basic questions about the production of goods?

• What to produce, how to produce, and for whom to produce.

• When to produce, where to produce, and why to produce.

• How much to produce, how to sell, and how to store.

• Who will produce, who will consume, and who will distribute.

What is the opportunity cost?

• The value of the next best alternative given up when a decision is made.

• The cost of producing a good or service.

• The amount of money spent on a vacation.

• The price of a product in the market.

What are trade-offs?

• Sacrificing one thing to gain something else.

• The process of trading goods and services.

• The act of saving money for future use.

• The method of producing goods efficiently.

In which economic system is the government most likely to provide people with goods and services they could not otherwise afford?

• Command economy.

• Market economy.

• Mixed economy.

• Traditional economy.

What are the advantages of a market economy?

• Efficiency, consumer choice, and innovation.

• Government control, stability, and equality.

• Limited resources, high prices, and low competition.

• Central planning, fixed prices, and limited choices.

What is the most common economic system in the world today?

• Command economy

• Mixed economy

• Traditional economy

• Market economy

What are three synonyms that can be used to describe the American Economic system?

• Socialism, Communism, Mixed economy

• Capitalism, Free-market economy, Market-driven economy

• Traditional economy, Command economy, Barter system

• Planned economy, Regulated economy, Controlled economy

How do economists define incentives?

• Factors that discourage individuals from making decisions

• Factors that motivate individuals to make decisions and take actions

• Factors that have no impact on decision-making

• Factors that only affect financial decisions

What are possible effects of inflation?

• Increased purchasing power, certainty, and lower wages

• Decreased purchasing power, uncertainty, and wage-price spiral

• Stable prices, increased savings, and reduced borrowing

• Higher purchasing power, economic stability, and lower interest rates