economics

What is scarcity in economics?

• When there are insufficient resources to meet society's wants and needs

• The value of the next-highest-valued alternative use of a resource

• States that human wants and needs are not fixed but unlimited

• An increase in consumers leads to an increase in demand

What does opportunity cost refer to?

• The assumption that human nature is to acquire more

• The value of the next-highest-valued alternative use of a resource

• An increase in demand for lower priced products

• The ownership associated with assessing risk and reward

What does the free-market theory state?

• Human wants and needs are fixed and limited

• Human wants and needs are not fixed but unlimited

• An increase in consumers leads to an increase in demand

• Future expectations about price can affect demand

What is the effect of changes in the number of consumers?

• Leads to a decrease in demand

• Leads to an increase in demand and vice versa

• Has no effect on demand

• Only affects supply

What is capital in economic terms?

• All human resources used to produce goods

• Man-made tools and materials used in the production process

• All natural resources, including renewable and nonrenewable

• The behavior of an individual economic agent

What does microeconomics focus on?

• The overall performance of an economy

• The behavior of an individual economic agent

• Inflation and unemployment

• Economic growth

What effect does an improvement in technology have on supply?

• Decreases supply

• Increases supply

• No effect on supply

• Decreases demand

What is the role of entrepreneurs in economic activity?

• Decrease production costs

• Organize resources to produce goods or services

• Increase taxes

• Reduce government spending

Which of the following is a characteristic of pure competition?

• Few buyers and sellers

• Many buyers and sellers

• Single buyer

• Single seller

What is a key feature of expansionary fiscal policy?

• Increased taxes

• Decreased government spending

• Increased transfer payments

• Reduced transfer payments