Economic Concepts Quiz

Scarcity occurs because resources are __, but human wants are unlimited.

In the circular flow model, households are the __ of resources.

Economic freedom allows individuals to make their own __ decisions.

A __ is a legal maximum price set by the government.

When quantity demanded exceeds quantity supplied, it is known as a __.

What is the primary reason scarcity exists in economies?

• Unlimited resources

• Limited human wants

• Limited resources

• Unlimited wages

In the circular flow model, what role do firms play?

• They consume goods and services

• They own resources

• They produce goods and services

• They set government policies

Which of the following is a characteristic of a market economy?

• Government ownership of resources

• Centralized decision-making

• Economic freedom

• Fixed prices by the government

What happens when a price ceiling is set below the equilibrium price?

• Surplus

• Shortage

• Equilibrium

• No effect

Which factor does not directly affect supply in the market?

• Production costs

• Consumer preferences

• Technology

• Number of sellers