Fundamentals of Economics Quiz

Which of the following BEST describes the fundamental economic problem?

• The stock market is unpredictable.

• Unlimited wants and needs with limited resources.

• The government prints too much money.

• Some people are rich and others are poor.

What is the difference between scarcity and shortage?

• Scarcity is a temporary lack of goods, while a shortage is a permanent condition.

• Scarcity is a permanent condition, while a shortage is a temporary lack of goods.

• Scarcity and shortage are the same thing.

• Scarcity only applies to developing countries, while shortages can happen anywhere.

Which of the following is an example of a 'need'?

• A new car

• A smartphone

• A place to live

• A vacation

The opportunity cost of a decision is:

• The money you spend on the decision.

• The time you waste making the decision.

• The most desirable alternative you give up.

• The total value of all the alternatives you didn't choose.

Which of the following is NOT one of the four main factors of production?

• Land

• Labor

• Money

• Capital

A factory building is an example of which factor of production?

• Land

• Labor

• Physical Capital

• Human Capital

An assembly line worker is an example of which factor of production?

• Land

• Labor

• Capital

• Entrepreneurship

In a command economy, who answers the three basic economic questions?

• The consumers

• The producers

• The government

• The market

Which of the following is a characteristic of a market economy?

• Central planning by the government.

• Government ownership of all resources.

• Economic decisions are based on customs and traditions.

• Private ownership of property and resources.

The United States has which type of economic system?

• Command

• Market

• Mixed

• Traditional