Fundamentals of Economics Quiz

What is the term used to describe the limited nature of society's resources?

• Wants

• Scarcity

• Needs

• Goods

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

• Land

• Labor

• Money

• Capital

What is the primary focus of microeconomics?

• The study of individual markets and consumer behavior

• The study of national economies and global trends

• The study of historical economic systems

• The study of economic statistics

Which term describes the satisfaction or benefit derived from consuming a product?

• Utility

• Incentive

• Trade-off

• Opportunity cost

What does a production possibilities curve illustrate?

• The maximum possible output combinations of two goods or services an economy can achieve

• The relationship between supply and demand

• The cost of producing one more unit of a good

• The total utility derived from consuming a good

What is the term for the cost of the next best alternative when a choice is made?

• Marginal cost

• Opportunity cost

• Trade-off

• Underutilization

Which of the following best describes positive economics?

• It involves value judgments and opinions about what the economy should be like.

• It focuses on facts and cause-and-effect relationships.

• It is concerned with the allocation of resources.

• It studies the behavior of entire economies.

What is the law of increasing opportunity costs?

• As production of a good increases, the opportunity cost of producing an additional unit rises.

• As production of a good increases, the opportunity cost of producing an additional unit decreases.

• The opportunity cost remains constant regardless of production levels.

• The opportunity cost is irrelevant to production decisions.

Which of the following is an example of a service?

• A smartphone

• A haircut

• A book

• A car

What is the purpose of a cost-benefit analysis?

• To determine the maximum output of an economy

• To compare the costs and benefits of a decision

• To calculate the total utility of a good

• To measure the efficiency of production