Front

Which situation are economists describing when they use the term scarcity?

Back

when one does not have enough resources to satisfy all of one's wants

Front

How does scarcity affect the economic decisions of a society?

Back

It forces the society to choose how to best use its limited resources.

Front

Which of the following is NOT one of the three basic economic decisions every society must make? Options: what goods and services to produce, how to produce goods and services, for whom to produce goods and services, whether to produce goods and services

Back

whether to produce goods and services

Front

How is a market economy different from a command economy?

Back

The interaction of supply and demand sets prices in a market economy, while the government sets prices in a command economy.

Front

Why do economic decisions require individuals, businesses, and governments to make trade-offs?

Back

Using the resources needed to buy or make one good or service means not having those resources to buy or make another.

Front

What is the correct definition of an opportunity cost?

Back

the cost of choosing to do one thing rather than choosing the next best option

Front

How can knowing the opportunity cost of buying a product affect people's economic decisions? Options: It can show them how to avoid a trade-off and use the same resources to meet two needs rather than one., It can help them to prioritize two possible uses of their money and guide them to choose the best option.  
, It can force them to recognize how the decision they are about to make compares to all other possible decisions., It can lead them to consider the ways in which buying the product supports a flawed and unjust economic system.

Back

It can help them to prioritize two possible uses of their money and guide them to choose the best option.  

Front

How are fixed costs different from variable costs?

Back

Fixed costs do not change no matter how much a business produces; variable costs do change.

Front

Why should Carol build the smaller house that will cost less, assuming she wants to spend as little money as possible?

Back

Since the cost of the land is fixed, Carol can limit the variable cost of construction by building the smaller house.

Front

What is the correct definition of a marginal analysis?

Back

an economic model that compares the additional benefit of doing something with the additional cost of doing it