Unit 2-Fundamental Economic Concepts

What is the basic economic problem?

• Opportunity Cost

• Scarcity

• Factors of production

• Goods and Services

Someone from a family of hunters becomes a hunter. What economic system is that an example of?

• Market Economy

• Mixed Economy

• Traditional Economy

• Command Economy

Which of these economic goals are usually associated with a market economy?

• Stability, Efficiency, and Growth

• Freedom, Equity, and Stability

• Efficiency, Freedom, and Growth

• Security, Stability, and Equity

The higher you education, the higher your standard of living.

• True

• False

What is allocation?

• The next best choice when you make a decision

• The consumers desire to buy a product

• The distribution of goods and services

• None of the above

Which of the above is a factor of production?

• Supply

• Demand

• Trade-offs

• Land

Opportunity cost is the next best choice when a decision is made.

• False

• True

What is the study of the behaviors of individuals within an economy?

• Macroeconomics

• Microeconomics

• Economics

Marginal cost is the utility you get for adding one more of something.

• True

• False

If the marginal cost of an action exceeds its marginal benefit, then we should not do it.

• True

• False