Master Basic Economic Concepts: Quiz Yourself Today!

Question 1

Which fundamental economic principle suggests that individuals must make choices between their limited resources and desires?

Accepted Answer

Opportunity cost

Answer

Supply and demand

Answer

Production possibilities

Answer

Economic growth

Question 2

When the quantity demanded surpasses the quantity supplied in a market, the market is in a state of:

Accepted Answer

Shortage

Answer

Equilibrium

Answer

Surplus

Answer

Elasticity

Question 3

Which of the following illustrates an opportunity cost?

Accepted Answer

Deciding to attend a movie instead of a concert

Answer

Purchasing a new car

Answer

Receiving a birthday gift

Answer

Discovering a discount on a product

Question 4

Which economic system is characterized by private ownership of resources and limited government intervention in the economy?

Accepted Answer

Capitalism

Answer

Socialism

Answer

Communism

Answer

Mixed economy

Question 5

Which economic indicator measures the overall value of goods and services produced within a country?

Accepted Answer

Gross domestic product (GDP)

Answer

Consumer price index (CPI)

Answer

Unemployment rate

Answer

Balance of payments

Question 6

Which of the following is **not** a factor that influences supply and demand?

Accepted Answer

Weather

Answer

Price

Answer

Income

Answer

Technology

Question 7

Which of the following is a feature of a **market economy**?

Accepted Answer

Individuals make economic decisions

Answer

The government controls production

Answer

Prices are set by the government

Answer

Resources are allocated centrally

Question 8

What is the significance of **scarcity** in economics?

Accepted Answer

It forces us to make choices

Answer

It ensures everyone has enough resources

Answer

It makes producing goods and services difficult

Answer

It has no impact on economics

Question 9

When the price of a good or service goes down, what typically happens to **demand**?

Accepted Answer

It increases

Answer

It decreases

Answer

It stays the same

Answer

It becomes unpredictable.

Question 10

What is the purpose of a **production possibility frontier (PPF)**?

Accepted Answer

To show the various combinations of goods and services that can be produced with limited resources

Answer

To determine the best way to produce goods and services

Answer

To calculate the opportunity cost of producing goods and services

Answer

To forecast future economic growth

Question 11

Which of the following is **not** an advantage of **specialization**?

Accepted Answer

Increased competition

Answer

Greater efficiency

Answer

Enhanced quality of goods and services

Answer

Lower prices

Question 12

Which concept describes the connection between the availability and cost of a product?

Accepted Answer

Supply and Demand

Answer

Scarcity

Answer

Opportunity Cost

Answer

Inflation

Question 13

What is the term for the limited availability of resources and the unlimited human desires?

Accepted Answer

Scarcity

Answer

Supply and Demand

Answer

Opportunity Cost

Answer

Inflation

Question 14

The concept of __ describes the valuable alternative we give up when making a choice.

Accepted Answer

Opportunity Cost

Answer

Supply and Demand

Answer

Scarcity

Answer

Inflation

Question 15

What distinguishes a need from a want?

Accepted Answer

Needs are essential for survival, while wants are not.

Answer

Wants are essential for survival, while needs are not.

Answer

Needs and wants are the same.

Answer

Needs are more important than wants.

Question 16

Inflation refers to a:

Accepted Answer

General price increase and loss of purchasing power

Answer

General price decrease and increase in purchasing power

Answer

Specific price increase in certain goods

Answer

Stable price level over time

Question 17

When the supply of a product increases while the demand remains constant, what will happen to the market price?

Accepted Answer

Decrease

Answer

Increase

Answer

Remain the same

Question 18

Which of the following is an example of an opportunity cost?

Accepted Answer

The time you spend studying for a test

Answer

The money you spend on a movie ticket

Answer

The allowance you save in your bank account

Question 19

When the government sets a price ceiling below the equilibrium price, what is a likely outcome?

Accepted Answer

Shortage

Answer

Surplus

Answer

Equilibrium

Question 20

When a producer's marginal cost is greater than its marginal revenue, what should the producer do?

Accepted Answer

Decrease production

Answer

Increase production

Answer

Maintain the current production level

Question 21

The production possibilities frontier illustrates:

Accepted Answer

The various combinations of goods and services an economy can produce with its available resources

Answer

The resources available to an economy

Answer

The value of goods and services produced

Question 22

When the government reduces its spending, what will likely happen to aggregate demand?

Accepted Answer

Decrease

Answer

Increase

Answer

Remain unchanged

Question 23

Which of the following is an example of an opportunity cost?

Accepted Answer

Choosing to study for a test instead of watching a movie

Answer

Saving money to buy a new car

Answer

Getting a job to earn money

Answer

Deciding to eat a healthy meal

Question 24

How does scarcity affect economic decision-making?

Accepted Answer

It forces us to make choices about how to use our limited resources

Answer

It ensures that everyone has access to everything they need

Answer

It makes it impossible for businesses to produce goods and services

Answer

It eliminates competition between buyers and sellers

Question 25

Which of the following is a key feature of a market economy?

Accepted Answer

Consumers and producers make economic decisions based on prices

Answer

The government controls all economic activity

Answer

Economic decisions are made collectively by a central planning authority

Answer

Consumers have no choice in what goods and services to buy

Question 26

What can happen when the government sets a price ceiling for a good or service?

Accepted Answer

The quantity supplied will decrease, and the quantity demanded will increase

Answer

The quantity supplied will increase, and the quantity demanded will decrease

Answer

The quantity supplied and demanded will both increase

Answer

The quantity supplied and demanded will both decrease

Question 27

Which of the following best describes the main problem caused by scarcity?

Accepted Answer

Limited resources are available to meet unlimited human wants.

Answer

Unlimited resources are available to meet unlimited human wants.

Answer

People cannot produce enough goods and services to meet their needs.

Question 28

In a market situation, what happens when the quantity of a product that is available exceeds the quantity demanded?

Accepted Answer

Surplus occurs

Answer

Shortage occurs

Answer

Equilibrium occurs

Answer

Inflation occurs

Question 29

When does a market reach equilibrium?

Accepted Answer

When the quantity supplied equals the quantity demanded

Answer

When there is excess supply

Answer

When there is excess demand

Answer

When there is no supply or demand

Question 30

If a new technology makes it easier and cheaper to make a product, what is likely to happen to the supply curve for that product?

Accepted Answer

It will shift to the right

Answer

It will shift to the left

Answer

It will not change

Answer

It will become vertical

Question 31

Which of the following is NOT a fundamental question in economics?

Accepted Answer

How can the economy be controlled?

Answer

What products should be made?

Answer

Who should the products be made for?

Answer

How do we use our limited resources wisely?

Question 32

Which economic system emphasizes private ownership, competition, and limited government intervention?

Accepted Answer

Capitalism

Answer

Socialism

Answer

Communism

Question 33

When demand for a product increases but supply remains constant, what typically happens to the price?

Accepted Answer

Increases

Answer

Decreases

Answer

Stays the same

Answer

Fluctuates

Question 34

Which scenario best illustrates scarcity?

Accepted Answer

Limited amount of land for housing

Answer

An endless supply of bottled water

Answer

Abundance of energy resources

Answer

Unlimited access to healthcare

Question 35

When you make a choice, what do you give up?

Accepted Answer

The value of the alternative you didn't choose

Answer

The money you spend

Answer

The time you invest

Answer

The energy you exert

Question 36

Which feature is unique to a free market economy?

Accepted Answer

Private ownership of property

Answer

Government control of production

Answer

Centralized planning

Answer

Fixed prices

Question 37

Which characteristic is NOT associated with a market economy?

Accepted Answer

Centralized price determination by the government

Answer

Competitive market forces

Answer

Profit-oriented businesses

Answer

Private property ownership

Question 38

When the quantity of a product supplied surpasses the quantity demanded, what market condition arises?

Accepted Answer

Surplus

Answer

Disequilibrium

Answer

Equilibrium

Answer

Shortage

Question 39

What term describes the change in overall satisfaction derived from consuming an additional unit of a good or service?

Accepted Answer

Marginal utility

Answer

Average utility

Answer

Total utility

Answer

Indifference utility

Question 40

In a market, the price where the quantity supplied and quantity demanded are equal is known as the:

Accepted Answer

Equilibrium price

Answer

Ceiling price

Answer

Market price

Answer

Floor price

Question 41

The concept of __ refers to the value of the alternative choice that is foregone when a decision is made.

Accepted Answer

Opportunity cost

Answer

Variable cost

Answer

Sunk cost

Answer

Fixed cost

Question 42

Which type of economic system is characterized by significant government involvement in decision-making and resource allocation?

Accepted Answer

Command economy

Answer

Free market economy

Answer

Traditional economy

Answer

Mixed economy

Question 43

Which of these is NOT a determinant of supply?

Accepted Answer

Consumer demand

Answer

Production costs

Answer

Number of producers

Answer

Government regulations

Question 44

Generally, what happens to demand when price increases?

Accepted Answer

Decreases

Answer

Increases

Answer

Remains the same

Answer

Cannot be determined

Question 45

An example of opportunity cost is:

Accepted Answer

Choosing to attend school instead of earning wages

Answer

Purchasing a new car with cash

Answer

Receiving a birthday gift

Answer

Winning a contest

Question 46

What is the law of diminishing marginal utility?

Accepted Answer

As you consume more of a product, the additional satisfaction you get from each additional unit decreases.

Answer

As you consume more of a product, the additional satisfaction you get from each additional unit increases.

Question 47

The primary purpose of a market is to:

Accepted Answer

Facilitate the exchange of goods and services

Answer

Generate employment opportunities

Answer

Control the economy

Answer

Safeguard consumers

Question 48

Which of these is a characteristic of a free market economy?

Accepted Answer

Limited government intervention

Answer

Price controls

Answer

Centralized planning

Answer

High levels of taxation

Question 49

What distinguishes microeconomic from macroeconomic analysis?

Accepted Answer

Microeconomics examines individual markets and businesses, while macroeconomics focuses on the economy as a whole.

Answer

Microeconomics focuses on the short term, while macroeconomics focuses on the long term.

Question 50

Which metric is used to measure economic growth?

Accepted Answer

Gross Domestic Product (GDP)

Answer

Consumer Price Index (CPI)

Answer

Unemployment rate

Answer

Dow Jones Industrial Average