Economics Basics: Microeconomics, Macroeconomics, and Economic Systems
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Questions and Answers

What is the primary focus of economics as a field of study?

  • The functioning of the entire economy
  • The behavior of individual entities and markets
  • The study of how societies utilize scarce resources to produce valuable goods and services (correct)
  • The relationship between scarcity and choice

What is the opportunity cost of a decision?

  • The total cost of production
  • The monetary value of the chosen alternative
  • The forgone benefit of the chosen alternative
  • The value of the best alternative use of resources (correct)

What determines the selection of products and prices in a free market system?

  • The circular flow of income
  • The supply and demand curves
  • The interaction between buyers and sellers (correct)
  • Government intervention and regulation

What is the relationship between scarcity and choice?

<p>Choosing one thing means giving up something else (A)</p> Signup and view all the answers

What is the ultimate result of the interplay between supply and demand in a free market system?

<p>Supply and demand will come to an equilibrium (C)</p> Signup and view all the answers

What is the direction of the demand curve?

<p>Downward sloping (C)</p> Signup and view all the answers

What happens to the quantity supplied when the price of the good increases, ceteris paribus?

<p>It increases (B)</p> Signup and view all the answers

What is the result of a surplus in a market?

<p>The quantity supplied exceeds the quantity demanded (D)</p> Signup and view all the answers

What is the effect of an increase in income on the demand for normal products?

<p>Demand increases (A)</p> Signup and view all the answers

What is the characteristic of a monopolistic competition market structure?

<p>There are many buyers and sellers, but the products are differentiated (A)</p> Signup and view all the answers

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