#1
What is the concept of scarcity in economics?
The unlimited wants exceed limited resources
ExplanationThe inherent imbalance between our desires and the resources available to satisfy them.
#2
What is the distinguishing feature of a private good?
Excludability
ExplanationCan be restricted to those who pay for it.
#3
Which of the following is NOT a factor of production?
Money
ExplanationWhile important for transactions, money is not a factor directly used in production.
#4
In economics, what does the term 'rent' refer to?
Payment for the use of land
ExplanationCompensation for the use of a natural resource.
#5
Which of the following is a factor of production that represents the physical and mental effort of people?
Labor
ExplanationHuman input in the production process, including physical and intellectual labor.
#6
In economics, what does the term 'utility' refer to?
The ability of a good to satisfy human wants
ExplanationThe satisfaction derived from consuming a good or service.
#7
Which of the following is a characteristic of a public good?
Non-rivalry in consumption
ExplanationConsumption by one person does not reduce the availability of the good for others.
#8
Which of the following best describes a common resource?
Non-excludable and rival in consumption
ExplanationAnyone can use it, but one person's use diminishes its availability to others.
#9
Which of the following is an example of a common resource?
Clean air
ExplanationAccessible to all but depleted by overuse.
#10
Which of the following is a characteristic of a club good?
Excludable and rival in consumption
ExplanationLimited to paying members, and consumption by one member diminishes its availability to others in the club.
#11
What is the opportunity cost of a decision?
The cost of the next best alternative foregone
ExplanationThe value of what is sacrificed when choosing one option over another.
#12
Which of the following best describes a free rider problem?
When someone consumes a good without paying for it
ExplanationOccurs when individuals benefit from a public good without contributing to its production.