Understanding Economic Concepts and Graphs

What does a rightward shift in the demand curve indicate in a supply and demand graph?

• A decrease in demand

• An increase in demand

• A decrease in supply

• An increase in supply

Which of the following is a non-price determinant of supply?

• Consumer preferences

• Production technology

• Price of the good

• Income of consumers

In a production possibility curve, what does a point inside the curve represent?

• Efficient production

• Inefficient production

• Unattainable production

• Maximum production

What does the circular flow diagram illustrate?

• The relationship between supply and demand

• The flow of goods and services in an economy

• The trade-offs between two goods

• The opportunity cost of production

How is opportunity cost best defined?

• The total cost of producing a good

• The value of the next best alternative foregone

• The monetary cost of a decision

• The benefit received from a choice

What is scarcity in economic terms?

• Unlimited resources

• Limited resources and unlimited wants

• Limited wants and unlimited resources

• Unlimited resources and wants

Which of the following is an example of a trade-off?

• Choosing to study instead of going out with friends

• Buying a car with a loan

• Saving money in a bank account

• Receiving a paycheck

In cost-benefit analysis, what is the primary goal?

• To maximize costs

• To minimize benefits

• To compare the costs and benefits of a decision

• To ignore opportunity costs

What happens to the supply curve when there is an improvement in production technology?

• It shifts to the left

• It shifts to the right

• It becomes vertical

• It becomes horizontal

In a production possibility curve, what does a point on the curve represent?

• Inefficient production

• Efficient production

• Unattainable production

• Decreasing opportunity cost