Economics Worksheet - Multiple Choice Questions

Economics is primarily concerned with which of the following?

• Use of resources

• Methods of production

• future cost of goods

• values and objectives of a society

The value of the next best alternative that has to be given up for the action that is chosen is the

• trade off

• opportunity cost

• productivity

• factors of production

All the combinations of goods and services that can be produced in a given time with a fixed amount of resources are called

• Cost of production

• factors of production

• opportunity cost

• production possibilities

Land, labor, capital, and entrepreneurship are-

• cost of production

• opportunity cost

• production possibilities

• factors of production

A higher price reduces the quantity of a product demanded because:

• individuals will buy more of the product and less of its substitutes

• individuals will buy more of the item and less of its complement

• individuals will buy less of the product and more of its substitutes

• the purchasing power of individuals increases.

A hungry man is willing to pay a high price for food. After he is no longer hungry, he is not willing to pay the same high price. Which of the following best defines this example?

• Unit elasticity

• Diminishing marginal utility

• The substitution effect

• Resource scarcity

Equilibrium is reached when what occurs?

• there is no change in the quantity supplied

• demand decreases and supply increases

• price increases

• quantity supplied equals quantity demanded

Inflation occurs when

• The general price level of goods and services decreases over time.

• The unemployment rate rises above a certain threshold

• There is a sustained increase in the general price level of goods and services

• Interest rates rise sharply

The term "business cycle" refers to:

• The period in which businesses must pay taxes.

• Fluctuations in economic activity, such as expansion and contraction.

• The rotation of businesses in and out of the market.

• The amount of time it takes to produce a good or service.

Unemployment is defined as:

• People who are actively seeking work but unable to find employment

• The number of people not working regardless of their desire to work

• The total number of part time workers in an economy

• the number of people over the age of 65 who are not working