Microeconomics

Which of the following represents the concept of opportunity cost?

• The value of the next best alternative given up when a choice is made

• The benefit of an economic choice

• The cost of an economic choice

• The total cost of all alternatives

Scarcity in economics refers to

• The limited availability of resources relative to unlimited wants

• The abundance of resources

• The equal distribution of resources

• The excessive production of goods

Which of the following is not a factor of production?

• Money

• Labor

• Capital

• Natural Resources

What is the primary goal of a business in a market economy?

• maximizing profits

• equal distribution of wealth

• government intervention

• providing goods for everyone

Wants are:

• Unlimited

• Limited in number

• Easily satisfied

• None of the above

Which of the following best describes supply in economics?

• The quantity of a good or service that producers are willing and able to sell

• The quantity of a good or service that consumers are willing and able to buy

• The price of a good or service

• The demand for a good or service

What does the Law of Demand state?

• As the price of a good increases, the quantity demanded decreases.

• As the price of a good increases, the quantity demanded increases.

• As the price of a good decreases, the quantity demanded decreases.

• There is no relationship between price and quantity demanded.

Price elasticity of demand measures:

• How responsive quantity demanded is to a change in price

• How much consumers want a product

• How many firms supply a product

• How much producers are willing to supply at different prices

When supply equals demand in a market, it is called:

• An equilibrium price

• A shortage

• A surplus

• A shift in supply

If the price of gasoline increases, what is the likely impact on the demand for electric cars?

• an increase in demand

• a decrease in demand

• no change in demand

• an increase in supply