Quiz on Summer Homework (Economic Concepts &Thinking) JPE

1. What is economics primarily concerned with?

• Physical sciences
• Social sciences
• Natural resources
• Technology

2. Which of the following is a central concept in economics?

• Profit maximization
• Wealth accumulation
• Scarcity
• Consumer satisfaction

3. What does the concept of "opportunity cost" refer to?

• The cost of production
• The cost of government intervention
• The value of the next best alternative foregone
• The price of luxury goods

4. In economics, what are the basic economic questions?

• Who, what, when
• How, when, where
• What, how much, how
• Why, where, when

5. Which economic system relies on market forces to allocate resources?

• Planned economy
• Mixed economy
• Free market economy
• Command economy

6. What does the Production Possibilities Curve (PPC) model illustrate?

• Consumer preferences
• Resource allocation
• Government regulations
• Market demand

7. In the circular flow of income model, which sector represents consumers and households?

• Firms
• Government
• Foreign sector
• Households

8. What are "leakages" in the circular flow of income model?

• Money flowing out of the economy
• Goods and services provided by households
• Government expenditures
• Business investments

9. What does "ceteris paribus" mean in economic analysis?

• All else being equal
• Constant change
• Market equilibrium
• Perfect competition

10. What is the primary focus of positive economics?

• Making value judgments
• Testing hypotheses
• Promoting equity
• Ethical considerations