Scarcity in economics means:

• Unlimited resources, unlimited wants

• Limited resources, unlimited wants

• Unlimited resources, limited wants

• Limited resources, limited wants

The Production Possibility Curve (PPC) shows:

• Maximum possible output combinations of two goods

• Actual production in an economy

• The demand for goods in the market

• Government spending

Opportunity cost is:

• The cost of producing one more unit

• The next best alternative forgone

• The amount of money spent on production

• The profit earned from production

If moving from point C to D on the PPC requires giving up 1.5 kg of grapes to gain 1 kg of apples, the opportunity cost of 1 kg of apples is:

• 1.5 kg grapes

• 1 kg grapes

• 2 kg grapes

• 0.5 kg grapes

A movement along a demand curve occurs when:

• Price changes

• Consumer income changes

• Tastes change

• Technology changes

A shift in the demand curve occurs when:

• Price of the good changes

• Only supply changes

• Non-price factors change

• Quantity supplied changes

Normal goods have:

• Positive relationship with income

• Negative relationship with income

• No relationship with income

• Constant demand regardless of income

Inferior goods have:

• Positive income elasticity

• Negative income elasticity

• Zero income elasticity

• Elastic demand

Public goods are:

• Rival and excludable

• Non-rival and non-excludable

• Rival but non-excludable

• Excludable but non-rival

Merit goods are provided by the government because:

• They are harmful

• They are under-consumed if left to the market

• They have no cost

• They are private goods