Unit 1 Economics Quiz

Which of the following is considered a resource in economics?

• Happiness

• Land

• Tradition

• Music

What is the main focus of the field of Economics?

• Studying historical events

• Analyzing political systems

• Understanding how people choose to use resources

• Researching different cultures

What is the difference between 'needs' and 'wants'?

Answer explanation

Needs are necessary for survival, while wants are not.

What is scarcity in economics?

• The abundance of resources for production

• The unlimited wants and limited resources to meet those wants

• The equal distribution of goods and services

• The study of how resources are consumed

What is the opportunity cost of a choice?

Answer explanation

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

What does Marginal Analysis involve?

• Comparing the total benefits to the total costs

• Making decisions based on the average benefits and costs

• Making an economic decision by comparing the extra benefits to the extra costs

• Ignoring the costs and focusing solely on the benefits

What does marginal benefit refer to in economic terms?

• The total cost of producing one additional unit of a good or service

• The additional satisfaction or usefulness gained by consuming one more unit of a good or service

• The change in total cost when the quantity produced is reduced by one unit

• The fixed cost associated with producing goods or services

What are sunk costs?

• Costs that are expected to be incurred in the future

• Costs that vary depending on the production volume

• Costs that have already been incurred and should not affect future economic decisions

• Costs that are directly associated with the production of one more unit of a good or service

Which of the following is an example of a social concern that may influence economic decisions?

• The law of supply and demand

• The elasticity of a product

• Poverty and education

• The marginal utility of a good

What does the Production Possibility Curve (PPC) represent?

• The maximum price consumers are willing to pay for two goods

• The total revenue generated from the sale of two goods

• The maximum possible combinations of two goods that can be produced with available resources

• The minimum quantity of resources needed to produce two goods