The Foundation of Economics quiz

What is a "want"?

• Something that we need to survive

• Something that we desire to have

• Something that is always available

• Something that is produced by resources

Time, money, water, and land are all considered resources.

• True

• False

What does scarcity mean in economics?

• When resources are unlimited

• When wants are less than resources

• When wants are greater than the resources available to satisfy them

• When resources are not needed

Explain how scarcity affects the choices individuals and societies make.

• Scarcity forces individuals and societies to make choices about how to allocate limited resources to satisfy unlimited wants.

• Scarcity allows everyone to have everything they want.

• Scarcity means there are no choices to be made.

• Scarcity only affects businesses, not individuals or societies.

Why must each person make a choice when purchasing goods or services, regardless of their income level?

• Because scarcity requires everyone to make choices

• Because everyone has unlimited money

• Because goods and services are always free

• Because choices are only for low-income individuals

Explain how scarcity influences decision-making when purchasing goods or services. Use reasoning to support your answer.

• Scarcity means resources are limited, so individuals must prioritize and make choices about what to purchase.

• Scarcity means there are always enough goods for everyone, so no choices are needed.

• Scarcity only affects people with low income, so only they need to make choices.

• Scarcity is not related to purchasing decisions at all.

What is an opportunity cost?

• The most valued opportunity or alternative we give up when we make a choice.

• The total amount of money spent on a decision.

• The least important option available.

• The benefit gained from every choice made.

If you choose to buy a computer, what is the opportunity cost based on the information in the exhibit?

• Reading a book

• Taking a vacation in France

• Watching television

• Going to sleep at 9:00 p.m.

According to the exhibit, what is the opportunity cost of going to sleep at 9:00 p.m. instead of 11:00 p.m.?

• Reading a book

• Watching a two-hour video

• Buying a computer

• Taking a vacation in France

Based on the concept of opportunity cost shown in the exhibit, which of the following best describes opportunity cost?

• The value of the next best alternative given up when making a choice

• The total cost of all alternatives

• The amount of money spent on a choice

• The time spent on an activity