Understanding Economics: Producers and Consumers

What is the role of a producer in an economy?

• To consume goods and services

• To create goods and services

• To regulate prices

• To provide loans

Which of the following is an example of a service?

• A book

• A haircut

• A bicycle

• A sandwich

What happens to the price of a good when the demand increases but the supply remains the same?

• The price decreases

• The price stays the same

• The price increases

• The price becomes zero

How does the government typically pay for goods and services it provides?

• By printing more money

• By collecting taxes

• By borrowing from other countries

• By selling public property

Which of the following is an example of opportunity cost?

• Choosing to buy a toy instead of saving money

• Buying a toy and a book at the same time

• Receiving a gift from a friend

• Finding money on the street

What is voluntary exchange?

• Trading goods and services without any choice

• Trading goods and services by force

• Trading goods and services by mutual agreement

• Trading goods and services with government intervention

Which of the following is a need rather than a want?

• A smartphone

• A vacation

• Food

• A video game

If a bakery produces more bread than people want to buy, what is likely to happen to the price of bread?

• The price will increase

• The price will decrease

• The price will stay the same

• The price will become zero

Which of the following is an example of a good?

• A concert

• A car

• A cleaning service

• A lesson

What is the main reason people engage in voluntary exchange?

• To lose money

• To gain something they value more

• To avoid taxes

• To follow government orders