BMS Economics and Global Trade Quiz

Why does scarcity exist in all societies?

• People want more than can be produced.

• The government controls all resources.

• Technology has removed scarcity.

• Businesses refuse to produce enough goods.

Which of the following is an example of opportunity cost?

• Buying a video game instead of saving for a bike.

• Paying full price for a movie ticket.

• Finding a product on sale.

• Receiving a free meal at a restaurant.

A country with limited farmland must choose between growing food or producing cotton for clothing. If they choose food, what is the opportunity cost?

• A higher food supply

• More cotton for clothing

• A decrease in food prices

• Increased government spending

Which economic system is based on customs and historical precedent?

• Command economy

• Free market economy

• Traditional economy

• Mixed economy

In a command economy, who primarily decides what goods will be produced?

• Consumers

• The government

• Private businesses

• Banks

Which type of economy combines private ownership with government involvement?

• Free market economy

• Mixed economy

• Traditional economy

• Command economy

In a free market economy, what determines what is produced?

• The government

• Businesses only

• Consumers and businesses through supply and demand

• Nonprofit organizations

What happens when the demand for a product increases, but the supply remains the same?

• Prices go down

• Prices go up

• Prices stay the same

• The government sets a new price

If a business produces too much of a product and not enough people want to buy it, what is likely to happen?

• The price will increase

• The price will decrease

• The government will take control of the business

• Demand will increase

Which situation is an example of the law of supply?

• A store lowers prices and sells more items

• A company produces more goods when prices increase

• Consumers demand fewer goods when prices rise

• A company sells all of its inventory at a discount