Chapter 3 Test - Understanding Characteristics of Economics

Scarcity means unlimited resources.

• True
• False

Opportunity cost is what you give up when making a choice.

• True
• False

Supply means how much customers want to buy.

• True
• False

Demand means how much businesses want to sell.

• True
• False

Mixed economies combine elements of market and command.

• True
• False

Which is an example of scarcity?

• New iPhone
• Unlimited gas
• Drought limiting crops
• Free internet

Opportunity cost is…

• Free choices
• The next best thing you give up
• Government control
• Equilibrium price

Supply increases when prices…

• Rise
• Drop
• Stay the same
• Are free

When price increases, demand usually:

• Stays the same
• Decreases
• Increases
• Disappears completely

Equilibrium price is where:

• Demand is zero
• Supply is zero
• Quantity supplied equals quantity demanded
• Government sets price