ECONOMICS FINAL EXAM

Which of the following best describes why scarcity is a basic economic problem for every society?

• There are unlimited resources available

• People have unlimited wants but limited resources

• Governments control all resources

• Technology has eliminated scarcity

What does a production-possibilities curve primarily show?

• The maximum profit a company can make

• The trade-offs between producing two different goods

• The minimum amount of resources needed for production

• The optimal price for a product

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

• Land

• Labor

• Capital

• Money

What economic concept describes the next best alternative that must be given up when making a choice?

• Opportunity cost

• Marginal utility

• Economic efficiency

• Comparative advantage

Which combination represents the three basic economic questions that all societies must answer?

• Who, what, where

• What, when, why

• What, how, for whom

• Where, when, who

How does an increase in price generally affect the quantity demanded of a good?

• It increases the quantity demanded

• It decreases the quantity demanded

• It has no effect on the quantity demanded

• It causes the demand curve to shift right

Which of the following is a non-price determinant that can change demand?

• The price of the good itself

• Consumer income

• The quantity supplied

• The cost of production

On a supply-and-demand graph, what does the point where the supply and demand curves intersect represent?

• The shortage

• The surplus

• The equilibrium price and quantity

• The government-mandated price

What happens to the supply curve when production costs decrease?

• Supply shifts to the right

• Supply shifts to the left

• Supply becomes steeper

• Supply becomes flatter

What is the main difference between absolute advantage and comparative advantage?

• Absolute advantage considers opportunity costs, while comparative advantage doesn't

• Comparative advantage considers opportunity costs, while absolute advantage doesn't

• Absolute advantage only applies to developed countries

• Comparative advantage only applies to developing countries