WorksheetsEconomics Fundamentals Quiz
Total questions: 45
Worksheet time: 22mins
What is the fundamental problem that all societies face?
Inflation
Scarcity
High taxes
Which of the following is an example of a "need"?
Shelter
A smartphone
Designer shoes
Economics is best defined as the study of how people make choices to cope with scarcity.
Earn as much money as possible
Make choices to cope with scarcity
Eliminate their unlimited wants
A person who organizes and operates a business, taking on financial risks, is a(n):
Manager
Employee
Entrepreneur
If you choose to study for a test instead of going to a movie, the movie is your:
Incentive
Trade-off
When a government must choose between spending on the military or social programs, it faces a:
Guns or butter trade-off
Production possibilities curve
Budget surplus
Which type of capital includes a worker’s knowledge and skills?
Physical capital
Human capital
Monetary capital
Which function of money allows us to compare the values of different goods?
Store of value
Medium of exchange
Unit of account
An incentive is something that:
Forces a person to act against their will
Encourages or motivates a person to act
In which economic system do buyers and sellers determine what is produced?
Market economy
Command economy
Traditional economy
A "shortage" occurs when:
There is a permanent lack of a resource
Consumers want more than what is available at a certain price
A government decides to stop production
Physical capital refers to:
Cash held in a business bank account
Human-made objects used to create other goods
Raw materials found in nature
Which of the following is one of the three basic economic questions?
Where will we produce?
How will we produce?
Why will we produce?
Voluntary exchange is an arrangement where:
Both parties expect to gain from the trade
One party is forced to trade by the government
Only the seller benefits from the transaction
Which economic system relies on habit and ritual to answer economic questions?
Command
Mixed
Traditional
The "invisible hand" is a concept that suggests:
The government must guide all transactions
Self-interest and competition regulate the market
Prices should be fixed by a central authority
"Laissez-faire" is an economic philosophy that means:
The government should not interfere in the economy
The government should own all factories
Labor unions should control production
Which of these is a "trade-off"?
Giving up one thing to get another
The very best thing you didn't choose
Having enough resources for everyone
Why is labor considered a factor of production?
It is the money used to buy equipment
It is the effort people are paid to do
It is the land where a factory is built
A "market" is best described as:
A physical building where food is sold
An arrangement that allows buyers and sellers to exchange things
A government agency that sets prices
Consumer sovereignty means that:
Consumers have the power to decide what gets produced
The government protects consumers from high prices
Producers tell consumers what they must buy
What is a "safety net" in an economic context?
A bank account for emergency spending
Government programs that protect people in bad times
A wall built around a factory for security
Which of the following is an example of an "economic system"?
The banking industry
Capitalism
A grocery store chain
Efficiency in an economy means:
Using resources to maximize the production of goods
Providing equal income to every citizen
Allowing the government to set all prices
Thinking "at the margin" means deciding:
Whether to do or use one additional unit of some resource
To give up all your resources for one goal
To never make a choice between two goods
Standard of living refers to:
The amount of debt a person has
The level of economic prosperity in a society
The number of laws a government passes
A traditional economy is most likely to be found in:
Large industrial cities
Small, rural communities following old customs
Urban areas with modern infrastructure
Economic growth occurs when:
A nation produces more goods and services over time
The government stops all voluntary exchange
People decide to stop working
Which function of money makes bartering unnecessary?
Store of value
Medium of exchange
Unit of account
Specialization is when individuals or firms:
Try to produce every single thing they need
Concentrate their efforts on a limited number of activities
Stop trading with other nations
What is the main purpose of the production possibilities curve?
To show the maximum possible output combinations of two goods
To determine the price of goods in the market
To measure the amount of money in circulation
Which of the following best describes opportunity cost?
The money spent on producing a good
The total amount of resources used in production
The most desirable alternative given up as a result of a decision
Which economic system is characterized by government ownership of resources?
Command economy
Market economy
Traditional economy
A drought has made this year's tomato harvest smaller than usual. What will probably happen to the overall supply of tomato sauce?
The supply will probably go up
The supply will probably go down
The number of consumers who want and able to buy a good or service.
demand
supply
opportunity cost
entrepreneur
Which of the following is not one of three basic reasons for saving money?
Emergency fund
Large purchases
Have money available to lend to friends
Build wealth
Why is having a fully funded emergency fund so important when it comes to your financial well-being?
As long as you have a good-paying job, you really don’t need am emergency fund
The purpose of an emergency fund is to set money aside for unexpected financial emergencies and to provide a sense of financial security.
The purpose of an emergency fund is to have money set aside so that you never make large purchases, like vacations.
None of the above
In which category should you have to make the most cuts in the budget?
Savings
Variable/Flexible Expenses
Fixed Expenses
Emergency Fund
People who use resources are known in Economics as:
Consumers
Producers
Economists
People who use resources to create something for others are known in Economics as:
Consumers
Producers
Economists
The most basic economic problem:
Limited resources
Scarcity
Unlimited wants
All of these
A bank deposit, a haircut, and mail delivery are all examples of:
Goods
Services
A Chromebook, an Xbox, and a cell phone are all examples of:
Goods
Services
Food, shelter and water are all examples of:
Wants
Needs
