Unit 2: Exploring Economics Exam

What is scarcity?

• The ability to produce infinite resources

• The lack of desire for goods and services

• Not having enough resources to satisfy all wants and needs

• The abundance of goods

What does supply refer to in economics?

• The total demand for goods

• The amount of goods or services producers are willing to sell

• The value of imported goods

• The consumer's desire for a product

How does demand affect prices?

• Prices remain constant regardless of demand

• Prices decrease as demand increases

• Prices increase as demand increases

• Demand does not influence prices

What is an incentive?

• A punishment for not completing tasks

• A benefit that motivates people to act

• A tax on luxury goods

• A type of economic system

What is inflation?

• A decrease in the overall price level of goods

• An increase in the overall price level of goods and services

• The stabilization of market prices

• The reduction of consumer purchasing power

What is opportunity cost?

• The price of a product

• The time spent on a particular activity

• The value of the next best alternative given up

• The cost of a luxury item

Which of the following is a need?

• A smartphone

• A vacation

• Food and water

• Designer clothes

Which is an example of a want?

• Shelter

• Medicine

• A new video game

• Clean air

What is the study of economics about?

• It focuses solely on the production of goods

• It analyzes how resources are used to meet needs and wants

• It is concerned with the political structure of a country

• It deals only with the stock market

How do supply and demand work together?

• They always increase prices

• They determine the price of goods and services

• They have no impact on market prices

• They only affect luxury items