Economics Quiz

Which concept is essential in understanding the allocation of limited resources?

• efficiency

• equity

• scarcity

• productivity

Economists assume people choose something when its expected costs are less than its

• working life.

• chief competitors.

• anticipated benefits.

• required maintenance.

Which scenario best illustrates the concept of opportunity cost?

• Lisa decides to spend an hour studying for her economics exam instead of going to the movies with her friends.

• Tom notices that the price of rice has doubled from last year.

• Carla chooses to work overtime to earn extra money for her holiday.

• Kevin compares the fuel efficiency of different car models before making a purchase.

In a free market economy, how are prices primarily determined?

• Through government intervention.

• By the forces of supply and demand.

• Based on a fixed price list created annually.

What is the law of unintended consequences?

• Attempts to intervene always backfire.

• Actions often have unforeseen effects.

• Markets are always influenced by emotional factors.

• Economic booms are always followed by downturns.

In economics, what term is used to describe the situation where resources are limited to meet all wants and needs?

• Equilibrium

• Scarcity

• Efficiency

• Surplus

Which term best describes someone who creates and manages a new business, often taking on financial risks to do so?

• Manager

• Director

• Entrepreneur

• Employee

Why are tradeoffs necessary?

• Resources are limited.

• Every product has flaws.

• People want different things.

• Advertisers promote products.

What is the opportunity cost for John when he decides to return a borrowed book to the library early to avoid a late fee, even though he has not finished reading it?

What does it mean to maximize utility?

• To become as efficient as possible

• To gain the most satisfaction possible

• To strengthen a national infrastructure

• To strengthen the skills of a workforce