Understanding Basic Economic Concepts

What is the definition of scarcity in economics?

• Unlimited resources to meet unlimited wants

• Limited resources to meet unlimited wants

• Unlimited resources to meet limited wants

• Limited resources to meet limited wants

Which of the following best describes opportunity cost?

• The total cost of all resources used in production

• The value of the next best alternative foregone

• The cost of producing one more unit of a good

• The total revenue minus total cost

Which of the following is NOT considered a factor of production?

• Land

• Labor

• Money

• Capital

In a command economy, who makes the primary economic decisions?

• Individual consumers

• Private businesses

• The government

• International organizations

What is the primary focus of a market economy?

• Government planning

• Consumer choice

• Equal distribution of wealth

• Centralized control