Basic Economic Concepts Quiz

The fundamental economic problem that arises from an imbalance between limited resources and unlimited human wants.

The process of selecting one option out of several possibilities due to scarcity.

The value of the next best alternative that is forgone when a choice is made.

The act of allocating scarce resources among competing uses to maximise output and efficiency.

Anything useful or desirable to humans that can be used in the production of goods and services.

Any tangible item that has value and can be exchanged.

Intangible activities that provide satisfaction to consumers.

The needs and desires that humans seek to satisfy using goods and services.

The value of the next best alternative that must be given up when making a choice, due to limited resources.

The concept that resources are limited, while human wants are unlimited.

A curve that shows all possible combinations of two goods that can be produced with a given set of resources.

A point on the PPF represents the highest possible output an economy can achieve with its available resources.

A point inside the PPF shows that resources are not being used efficiently, meaning the economy could produce more of both goods.

A point outside the PPF is unattainable given current resources and technology.

The amount by which the production possibilities frontier shifts outward over time, representing a higher total output.

As we produce more of one good, the opportunity cost of producing another good increases. This makes the PPF concave to the origin.

An increase in the quantity or quality of resources, or technological advancements.

A shift of the PPF along either the X-axis or Y-axis, representing an increase in productivity in one sector.

The problem of how to allocate scarce resources among competing uses.

The problem of choosing the best production technique to produce goods and services, given different options available.

The problem of distributing the produced goods and services among the members of society.

A production technique that uses more labor relative to capital per unit of output.

A production technique that uses more capital relative to labor per unit of output.

An economic system where tradition, customs, and beliefs guide economic decisions, often relying on agriculture, fishing, hunting, and gathering. Barter is used instead of money.

The economic system characterized by private ownership of production resources, where individuals work for profit and government intervention is minimal.

An economic system where the state owns and centrally controls all means of production and distribution, guided by planned production and distribution.

A system that combines elements of both capitalist and command economic systems, allowing for private ownership alongside government regulation and intervention.

The use of more capital relative to labor in the production process, increasing output per worker.

The distribution of a nation's total output among its members, ensuring their needs and wants are met effectively.

The process of deciding for whom goods and services are produced, addressing concerns about fairness, equity, and the balance between different segments of society.

In a command economy, the government controls all aspects of production and distribution of goods and services. All businesses are owned by the state.

A system that combines elements of both capitalism and socialism, allowing for private ownership and market forces but with some government intervention.

A production possibility curve (PPC) visualises the maximum amount of two goods that an economy can produce with its available resources.

The idea that as we produce more of one good, the opportunity cost of producing additional units increases, leading to a concave shape of the PPC.

The central problems facing an economy due to scarcity. These questions deal with what to produce, how to produce and for whom to produce.

A set of organizational structures established to address the basic economic problems, addressing how resources are allocated and goods/services are produced.

This system is based on traditional customs, beliefs, and practices passed down through generations. Decisions are often made based on tradition and social norms.

In this system, the means of production are privately owned, and resource allocation is determined by market forces. Competition between businesses drives prices.