Econ Final Exam

What is scarcity in economics?

• Having unlimited resources and limited wants

• When resources are limited and wants are unlimited

• Equal distribution of goods and services

• A situation where no choices are required

What is opportunity cost?

• The total cost of a product

• The value of the next best alternative forgone

• The cost of producing goods

• The price of a good or service

In economics, what motivates people to make certain choices?

• Scarcity

• Incentives

• Demand

• Market equilibrium

What does GDP measure?

• The amount of goods and services exported

• The total value of goods and services produced in a country

• The total imports of a country

• The average income of citizens

What happens during inflation?

• Prices of goods and services decrease

• Prices of goods and services increase

• Unemployment rates decrease

• GDP decreases

What is fiscal policy?

• Adjusting interest rates to control the economy

• Government spending and taxation decisions

• Managing money supply and currency

• International trade agreements

What is the role of consumers in the market?

• To produce goods and services

• To buy goods and services

• To control market prices

• To regulate supply and demand

What does elasticity measure in economics?

• How much producers can produce

• How consumers respond to price changes

• How governments control prices

• How supply equals demand

What is equilibrium in a market?

• When supply exceeds demand

• When demand exceeds supply

• When supply equals demand

• When prices are controlled by the government

What is the main benefit of international trade?

• It increases competition among local producers

• It allows countries to specialize and increase efficiency

• It eliminates the need for imports

• It reduces the cost of all goods and services