Economic Resources and Allocation Quiz

Money is a human-made economic resource used for exchange and as a store of value.

Allocation in economics involves deciding how limited resources are distributed among competing wants and needs.

Opportunity cost refers to the value of the next best alternative that must be sacrificed when a decision is made.

Money serves as a capital resource facilitating production and investment in businesses and projects.

In a traditional economy, economic decisions are based on customs, traditions, and cultural practices passed down through generations.

In a market economy, resources are allocated based on consumer demand and market prices.

Opportunity cost represents the value of the alternative that must be sacrificed when a decision is made.

Renewable resources such as solar and wind energy can be naturally replenished over time, while non-renewable resources like fossil fuels are finite.

In a mixed economy, the government intervenes to ensure equitable access to resources and to address market failures.

Microeconomics analyzes the behavior of individual economic agents like consumers and firms, whereas macroeconomics studies aggregate economic phenomena such as inflation and unemployment.

The production possibility frontier shows the maximum combinations of goods and services that can be produced given available resources.

The invisible hand theory posits that individuals, by pursuing their own interests, unintentionally promote the well-being of society as a whole.

In a command economy, central government authorities determine what goods and services are produced and how resources are allocated.

In a market economy, resource allocation is primarily driven by the demands and choices of individuals and firms.