Economic Concepts Quiz

Which of the following best describes the basic economic problem?

• How to eliminate scarcity completely

• How to allocate scarce resources to satisfy unlimited wants

• How to produce unlimited goods and services

• How to prevent wants from increasing

Which factor of production includes the skills of a businessperson in managing resources?

• Land

• Labour

• Capital

• Enterprise

Which is an example of a free good?

• Gold

• Rainwater

• Wheat

• Oil

The reward for labour is:

• Profit

• Rent

• Wages and salaries

• Interest

Opportunity cost refers to:

• The price of a product

• The cost of the next best alternative forgone

• The total cost of production

• The amount of money spent on a good

On a PPC, a point inside the curve represents:

• Efficiency

• Inefficiency

• An unattainable combination

• Maximum use of resources

A rightward shift of the PPC can be caused by:

• Increase in unemployment

• Improvement in technology

• Decrease in resource quality

• War

The law of demand states that:

• As price increases, quantity demanded increases

• As price decreases, quantity demanded decreases

• As price increases, quantity demanded decreases

• Price and quantity demanded are unrelated

A fall in the price of a product causing a rise in quantity demanded is called:

• Contraction in demand

• Shift in demand

• Extension in demand

• Increase in supply

Which of the following is NOT a factor causing a shift in the demand curve?

• Changes in income

• Changes in tastes

• Change in the price of the product itself

• Advertising