Mr. Fox's Econ Quiz for Chapters 1-3

1. What is the fundamental problem of economics?

• 1. Scarcity

• 1. Unemployment

• 1. Economic growth

• 1. Inflation

1. Which of the following best describes opportunity cost?

• 1. The price of a good or service

• 1. The additional cost of producing one more unit

• 1. The amount of money spent on a choice

• 1. The value of the next best alternative foregone

1. In a market economy, who makes the decisions about what to produce?

• 1. Central planners

• 1. The military

• 1. Businesses and consumers

• 1. The government

1. The production possibilities frontier (PPF) illustrates:

• 1. The maximum possible output combinations of two goods

• 1. The equilibrium price of goods

• 1. The total demand for a product

• 1. The revenue-maximizing level of production

1. Which of the following would cause a PPF to shift outward?

• 1. Increased unemployment

• 1. A reduction in trade

• 1. A decrease in available resources

• 1. Technological advancement

1. In economic models, ceteris paribus means:

• 1. "At maximum efficiency"

• 1. "According to demand"

• 1. "All else held constant"

• 1. "Always increasing"

1. Which of the following is a public good?

• 1. A pair of shoes

• 1. A smartphone

• 1. A car

• 1. National defense

1. The law of demand states that:

• 1. Price and quantity demanded are directly related

• 1. Price and quantity demanded are inversely related

• 1. Higher income decreases demand

• 1. Supply determines demand

A price ceiling set below equilibrium price will cause: 

• A Surplus

• Equilibrium

• Problems

• A shortage

A price floor set above equilibrium price will cause:

• A surplus

• Toilet Paper Panic

• A Shortage

• Scarcity