Economics Concepts Quiz

What does scarcity in economics refer to?

• Unlimited resources

• Limited wants

• Limited resources and unlimited wants

• Unlimited income

Scarcity forces individuals and businesses to:

• Eliminate all wants

• Make choices

• Ignore costs

• Stop producing goods

Which of the following is not a result of scarcity?

• Opportunity cost

• Choices

• Unlimited production

• Trade-offs

A trade-off involves:

• Gaining everything you want

• Giving up one thing to gain another

• Avoiding choices

• Reducing production possibilities

When a business invests more in advertising instead of R&D, it is an example of:

• Specialization

• Trade-off

• Comparative advantage

• Free goods

Trade-offs apply to:

• Only large businesses

• Only governments

• Everyone

• None of the above

Opportunity cost is best defined as:

• The total monetary cost of a choice

• The value of the next best alternative foregone

• The profit earned from an investment

• The price you pay for a product

If a company chooses to produce shoes instead of shirts, the opportunity cost is:

• The cost of producing shoes

• The profit from selling shoes

• The shirts it could have produced

• The number of workers used

Which of the following does not involve opportunity cost?

• Free lunch provided by the school

• Spending time studying instead of watching TV

• Choosing between job offers

• Deciding whether to invest or save

The Production Possibility Frontier (PPF) shows:

• Maximum profits a firm can make

• The most efficient allocation of resources

• Unlimited production options

• Prices of goods in the market