Economic Concepts and Principles

What is economics primarily concerned with?

• The study of money and banks

• The study of choices in a world of scarcity

• The study of government policies

• The study of inflation and the economy

What is the central economic problem?

• How to make everyone rich

• How to allocate limited resources to satisfy unlimited wants

• How to control inflation

• How to manage international trade

Which of the following is NOT one of the three key questions addressed in economics regarding the economic problem?

• What to produce?

• How to produce?

• When to produce?

• Who to produce for?

What are the resources used to produce goods and services known as?

• Economic agents

• Factors of production

• Consumer spending

• Capital goods

Which factor of production includes natural resources like oil, gold, or land for farming?

• Labour

• Capital

• Enterprise

• Land

A teacher in a school or a pilot on a plane are examples of which factor of production?

• Labour

• Land

• Capital

• Enterprise

What term describes manufactured aids to production, such as ovens in a bakery or power stations?

• Land

• Labour

• Capital

• Enterprise

The creativity and risk-taking needed to combine other factors of production into something profitable is called what?

• Labour

• Enterprise

• Capital

• Land

What is the main source of spending by households called?

• Government spending

• Investment

• Consumer spending

• Profit maximization

What is the primary goal of households when making spending decisions?

• Maximizing profits

• Maximizing utility (satisfaction)

• Reducing inequality

• Increasing national debt