#1
What does economic scarcity imply?
Unlimited wants and limited resources
Unlimited resources and limited wants
Limited government and unlimited money
Unlimited money and limited wants
#2
In economics, what is a trade-off?
A balanced exchange of goods between two parties
The act of buying stock in the stock market
The exchange rate between two currencies
The sacrifice of one good or service to purchase or produce another
#3
Which of the following is NOT a factor of production?
#4
Which of the following is a key function of money in an economy?
Providing entertainment value
Facilitating exchange and trade
Generating interest
Enforcing contracts
#5
What is the term for the total value of all final goods and services produced within a country's borders in a specific time period?
Gross National Product (GNP)
Net Domestic Product (NDP)
Gross Domestic Product (GDP)
National Income
#6
In the context of international trade, what does the term 'tariff' refer to?
A tax on imports or exports
A form of government subsidy for domestic industries
A method of regulating currency exchange rates
A legal restriction on the quantity of a good that can be traded internationally
#7
Which concept describes the idea of giving up the next best choice when making a decision?
Supply and demand
Cost-benefit analysis
Opportunity cost
Marginal utility
#8
Which of the following best exemplifies the concept of 'guns or butter'?
Choosing between manufacturing consumer goods or military weapons
The decision between importing or exporting goods
Deciding on the level of taxes to impose
Choosing between two brands of butter
#9
What principle does the law of increasing opportunity costs illustrate?
As production of a good increases, the opportunity cost of producing an additional unit rises.
The cost of producing a good decreases as its production increases.
Opportunity costs decrease as the production of a good increases.
The opportunity cost of producing a good remains constant regardless of its production level.
#10
Economic efficiency occurs when:
The needs of the few outweigh the needs of the many.
Every resource is allocated to serve each individual without any waste.
A society chooses to produce luxury goods over essential goods.
The cost of production is at its highest.
#11
Marginal cost is defined as:
The cost of producing one more unit of a good.
The total cost divided by the quantity of goods produced.
The cost saved by producing one less unit of a good.
The initial cost of setting up a production facility.
#12
Which economic system is characterized by government ownership of most resources and central planning?
Capitalism
Socialism
Communism
Mixed economy
#13
What does the production possibilities frontier (PPF) illustrate?
The relationship between the prices of two goods
The maximum attainable combinations of two goods that can be produced with available resources and technology
The demand curve in a market
The elasticity of a product
#14
The concept of comparative advantage suggests that countries should:
Only produce goods for which they have the absolute advantage.
Produce goods for which they have the lowest opportunity cost.
Not engage in international trade.
Specialize in the production of goods for which they have the highest demand.
#15
What is the relationship between inflation and purchasing power?
Inflation increases purchasing power.
Inflation and purchasing power are unrelated.
Inflation decreases purchasing power.
Purchasing power has no impact on inflation.
#16
The Phillips Curve illustrates the trade-off between which two economic variables?
Inflation and unemployment
Interest rates and investment
Government spending and taxation
Exchange rates and trade balance
#17
What is 'deadweight loss'?
The cost associated with producing goods that no one buys
The reduction in economic efficiency that can occur when equilibrium for a good or service is not achieved
The total loss in producer and consumer surplus due to taxes or subsidies
Both b and c