Economics Quiz

What is the basic economic problem?

• Unlimited needs and wants but limited resources

• Limited resources but finite wants

• Arguments over which goods and services to produce and why

• How to best allocate resources in any economy

What is opportunity cost?

• The next best option for investing your money

• What else you could have spent your money on

• The next best available option foregone

• The alternative uses for your time and money

One of the basic economic questions is:

• Who will produce and at which price

• How much will be produced

• What to produce

• Where to produce

What is a free good?

• A good or service which is undersupplied by the free market

• A good or service which is unlimited in supply with no opportunity cost

• A good or service which is provided free by the government

• A good or service which is free for the consumer

Which of the following is a positive economic statement?

• The UK has a higher average standard of living than France

• The UK has a higher per capita GDP than France

• The UK has a higher living standard than France

• The UK offers more opportunities to make money than France

Economics is the study of:

• How society decides what how and for whom to produce

• How people choose to meet their needs and wants in the face of scarcity

• Production technology

• The best way to run society

Which of the following would be considered a rational decision by an economist?

• Purchasing decisions based on ‘animal spirits’

• A decision to save a high percentage of personal income

• A decision to forego current consumption in order to have greater purchasing power in the future

• A decision considering the utility of a product in relation to the price

In economics, models are:

• To present complex ideas in a simpler, more easily understood way

• Generally accurate to within 0.05%

• Designed to incorporate all potential variables

• Expressed using equations or diagrams which usually require the use of higher mathematics

Scarcity is the concept that:

• There are unlimited wants but finite resources to meet them

• All people do not have access to the same amount of money

• There is only so much to go around

• Humans are using resources faster than they can be replenished

Point G is

• Impossible

• Inefficient

• Evidence of growth

• Efficient