REV155 QUIZ MAC-AUG25

Economics is best defined as the study of:

• How to become wealthy

• How people make choices to satisfy their wants with limited resources

• How to manage a business

• How to reduce unemployment

Microeconomics is the study of:

• National income and inflation

• Government budget and spending

• . Individual and business decision-making

• International trade

Which of the following best explains the difference between microeconomics and macroeconomics?

• Microeconomics focuses on government policies; macroeconomics focuses on businesses

• Microeconomics studies individuals and firms; macroeconomics studies the whole economy

• Microeconomics is theoretical; macroeconomics is practical

• Microeconomics analyses international trade; macroeconomics studies agriculture

Which of the following is an example of capital as a factor of production?

• A factory building

• An employee

• A forest

• A manager

What does the term ‘opportunity cost’ mean?

• The cost of an item on sale

• The benefit gained from a decision

• The value of the next best alternative forgone

• The price paid in a transaction

The concept of opportunity cost is most closely related to which economic problem?

• Economic growth

•  Inflation

• Choice under scarcity

• Market equilibrium

The basic economic problems are:

• what, how and why to produce.

• what, when and why to produce.

• what, how and for whom to produce.

• what, when and for whom to produce.

Points outside the PPC represents:

• Efficient use of all resources

• Unattainable production with current resources

• Underutilization of resources

• Constant opportunity cost

According to the Law of Demand, when the price of a good increases:

• Demand increases

• . Demand decreases

• Quantity demanded increases

• Quantity demanded decreases

The Law of Supply states that, ceteris paribus:

• As price increases, supply decreases

• As price increases, quantity supplied increases

• As production cost increases, supply increases

• As income increases, supply increases