Economic Concepts and Decision Making

What is the main focus of economics?

• The study of money and getting rich

• The study of the stock market

• The study of people and their choices

• The study of forecasting market trends

What do economists call the value of the next best alternative that you give up when making a choice?

• Scarcity

• Benefit

• Opportunity cost

• Resource allocation

What is scarcity in economics?

• Having unlimited resources for all wants

• The tension between infinite wants and finite resources

• The study of how to get rich quickly

• The ability to produce everything you desire

Why are individuals, businesses, and countries forced to make choices?

• They have unlimited resources

• They can have everything they want

• They must weigh the benefits and costs of their decisions

• They are always forced by external factors

In economics, what does scarcity imply about resources and choices?

• Resources are unlimited, so choices are easy.

• Resources are limited, forcing choices to be made.

• Choices are always easy because resources are abundant.

• Choices are not necessary in a wealthy economy.

When resources are used for one purpose, like military spending, what economic concept describes the value of the next best alternative that was given up?

• Inflation

• Opportunity cost

• Economic growth

• Supply and demand

What are external motivators that influence people's decisions and actions?

• Rules and regulations

• Incentives

• Economic theories

• Government policies

In a historical example, a government offered money for rat tails to reduce the rat population. What was the unexpected outcome of this policy?

• The rat population was successfully eliminated.

• People started breeding rats to earn more money.

• The policy had no effect on the rat population.

• The government ran out of money due to too many rat tails.