Economics Ch.1 Vocabulary 2025

All economic choices involve _________________.

• trade-offs

• destruction of resources

• shortages

• tax dollars

Scarcity in economics means that:

• all needs are met

• resources are unlimited

• choices are unnecessary

• resources are limited

Which of the following is a fundamental economic problem?

• Inflation

• Scarcity

• Unemployment

• Recession

Opportunity cost is best defined as:

• the money spent on a choice

• the value of the next best alternative

• the time taken to make a decision

• the resources used in production

What is the primary reason for the existence of opportunity costs?

• Unlimited resources

• Excessive demand

• Limited resources

• Abundant choices

Which of the following best describes a trade-off in economics?

• Eliminating all alternatives

• Producing more goods than needed

• Choosing one option over another

• Maximizing resource use

Why is scarcity considered a fundamental economic problem?

• Because it eliminates competition

• Because it forces choices

• Because it increases unemployment

• Because it leads to inflation

What does the concept of opportunity cost imply in decision-making?

• That resources are infinite

• That choosing one option means forgoing another

• That decisions have no consequences

• That all options are equally valuable

How does scarcity influence economic choices?

• It necessitates prioritizing needs and wants

• It ensures all desires are fulfilled

• It allows for unlimited production

• It eliminates the need for budgeting

Which of the following statements about trade-offs is true?

• Trade-offs increase resource availability

• Trade-offs only occur in developing countries

• Trade-offs require sacrificing one goal for another

• Trade-offs are avoidable in a planned economy