10 Questions
What is the primary issue that leads to the economic problem?
Unlimited wants and scarce resources
Scarcity means something is rare.
False
What is the aim of any economic activity?
To convert economic resources into goods and services to satisfy the wants of citizens.
The word 'economics' is derived from a Greek word meaning 'the management of a _______________.
household
What is the level of economic problem where individuals face limitations on their income?
Personal level
All goods and services are abundant.
False
What are the three main choices that society must make due to the economic problem?
What output will be produced?, How shall the output be produced?, and For whom shall the output be produced?
Match the following levels of economic problem with their corresponding descriptions:
Personal level = Individuals face limitations on their income Business level = Firms face limitations on their sales receipts National level = Governments face limitations on their revenue International level = Countries face limitations on their resources
The concept of opportunity cost is related to the idea that resources have ______________ uses.
alternative
Economics is only concerned with the production of goods and services.
False
Study Notes
The Economic Problem
- The economic problem arises from the fundamental conflict between unlimited wants and scarce resources.
- Scarcity refers to a situation where society desires more of a good or service than is currently available.
- The economic problem is evident at various levels, including personal, business, national, and international.
Economic Choices
- Due to limited resources, society is forced to make choices about how to allocate resources.
- The three main economic choices are:
- What goods and services to produce?
- How to produce these goods and services?
- For whom to produce these goods and services?
- The primary goal of economic activity is to convert resources into goods and services to satisfy human wants.
Opportunity Cost
- The concept of opportunity cost is central to economics, as it recognizes that resources have alternative uses.
- In choosing to produce one good or service, society must forgo the production of another good or service.
- Examples of opportunity costs include:
- Forgoing leisure time to work overtime.
- Allocating resources to build houses instead of sport centers.
This quiz covers the concept of the economic problem, where unlimited wants exceed scarce resources. It explores the meaning of scarcity and its impact on individuals and society.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
