Economics Worksheet: Multiple Choice Questions

What does the term economic environment refer to?

• Government regulations

• Internal company policies

• External economic factors affecting business decisions

• Marketing strategies

Microeconomics studies:

• National economic growth

• Individual households and firms

• International trade

• Government spending

What is opportunity cost?

• Money spent on advertising

• Cost of hiring employees

• The benefit of the next best alternative forgone

• Profit from selling goods

Rational decision making involves:

• Ignoring costs

• Choosing what’s trending

• Choosing the option with greatest benefit relative to cost

• Flipping a coin

Marginal cost is:

• Total cost of production

• Cost of producing one more unit

• Cost of setting up the business

• None of the above

Marginal benefit refers to:

According to the law of demand, when price decreases:

• Demand increases

• Demand decreases

• Supply increases

• Supply decreases

Which of the following affects demand?

• Income

• Cost of raw materials

• Number of producers

• Government regulations

Which of these products likely has elastic demand?

• Fuel

• Insulin

• Washing machine

• Bread

A product with inelastic demand will show:

• Large change in demand with price change

• No change in demand regardless of price

• Small change in demand with price change

• Increase in supply