CTY Practice Post

Economics deals primarily with the concept of:

• Scarcity

• Money

• Poverty

• Banking

A basic underlying point in economics is that:

• People have limited wants in the face of limited resources

• People have unlimited wants in the face of limited resources

• Governments should satisfy the needs of the people

• Governments should never interfere in the workings of a market economy

In most societies, resources are allocated by:

• A single central planner

• A small number of central planners

• Those firms that use resources to provide goods and services

• The combined actions of millions of households and firms

The 'invisible hand' directs economic activity through:

• Advertising

• Prices

• Central planning

• Government regulations

The opportunity cost of an item is:

• The government estimate of a cost factor

• What you give up to get that item

• Usually less than the dollar value of the item

• The dollar value of the item

A supply curve slopes upward because:

• As more is produced, total cost of production falls

• An increase in input prices increases supply

• The quantity supplied of most goods and services increases over time

• An increase in price gives producers an incentive to supply a larger quantity

An increase in the price of a good will:

• Increase demand

• Decrease demand

• Increase quantity demanded

• Decrease quantity demanded

“Other things equal, when the price of a good rises, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises.” This relationship between price and quantity demanded is referred to as:

• Equilibrium

• The law of demand

• The relationship between supply and demand

• The definition of an inferior good

The forces that make market economies work are:

• Work and leisure

• Politics and religion

• Supply and demand

• Taxes and government spending

The quantity demanded of a good is the amount that buyers are:

• Willing to purchase

• Willing and able to purchase

• Willing, able, and need to purchase

• Able to purchase