ECO MCQ

What is the primary reason why people face trade-offs?

• Resources are abundant

• People prefer making difficult decisions

• Resources are scarce

Opportunity cost is best described as:

• The money spent on an item

• The value of the next best alternative forgone

• The total cost of production

What does the "invisible hand" in economics refer to?

• Government intervention

• The self-regulating nature of markets

• The hidden cost of goods

When does market failure occur?

• When markets allocate resources efficiently

• When markets fail to allocate resources efficiently

• When consumers make irrational choices

What is the main factor that determines a country's standard of living?

• The amount of natural resources

• Its ability to produce goods and services

• The population size

Economics as a science relies on:

• The use of the scientific method

• Political debates

• Random guesswork

What is a normative statement?

• A statement based on facts

• A statement about how the world should be

• A statement that describes the world as it is

The production possibilities frontier (PPF) shows:

• The maximum combinations of goods and services that can be produced

• The amount of money in circulation

• The number of businesses in an economy

Microeconomics focuses on:

• National economic trends

• The behavior of individual firms and households

• Global trade policies

A circular flow diagram represents:

• The flow of money and goods in an economy

• The movement of planets in space

• The cycle of unemployment