Understanding Basic Economic Concepts

What is an opportunity cost?

• The price you pay for an item

• The benefits you miss out on by choosing one option over another

• The cost of an opportunity

• A type of savings account

What is the economy?

• A system of producing, selling, and buying goods and services

• The money saved in a country’s bank

• The way people use credit cards

• A type of government

How do producers decide what they are going to make?

• By guessing what people might like

• By looking at what consumers want and need

• By making whatever costs the most money

• By choosing items they prefer

What two things make up market forces?

• Supply and demand

• Needs and wants

• Inflation and interest

• Resources and deposits

Which type of economy depends on bartering?

• Traditional economy

• Command economy

• Market economy

• Mixed economy

Which type of economy depends on farming and hunting to supply needs?

• Traditional economy

• Command economy

• Market economy

• Mixed economy

What type of economy does the government have little control over?

• Command economy

• Market economy

• Traditional economy

• Mixed economy

Which type of economy does not have competition between businesses?

• Market economy

• Command economy

• Traditional economy

• Mixed economy

North Korea is an example of which type of economy?

• Market economy

• Mixed economy

• Command economy

• Traditional economy

What is the difference between a savings account and a checking account?

• Savings accounts are used for everyday spending, while checking accounts are for long-term savings.

• Checking accounts are for everyday spending, while savings accounts are for saving money over time.

• Both accounts are the same.

• Checking accounts earn more interest than savings accounts.