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Questions and Answers
Which of the following best defines scarcity?
Which of the following best defines scarcity?
- The availability of free goods
- The unlimited wants and needs of society (correct)
- The efficient allocation of resources
- The abundance of resources
What is the opportunity cost of a decision?
What is the opportunity cost of a decision?
- The value of the next best alternative foregone (correct)
- The benefits gained from the decision
- The total cost of all alternatives
- The monetary value of the decision
What does a Production Possibility Curve (PPC) represent?
What does a Production Possibility Curve (PPC) represent?
- The demand and supply of goods in an economy
- The level of economic growth in an economy
- The distribution of resources in an economy
- The maximum production capacity of an economy (correct)
Study Notes
Scarcity and Opportunity Cost
- Scarcity refers to the fundamental economic problem of unlimited wants and needs, but limited resources to satisfy them.
Opportunity Cost
- Opportunity cost is the value of the next best alternative that is given up when a choice is made.
Production Possibility Curve (PPC)
- A Production Possibility Curve (PPC) is a graph that shows the various combinations of two goods that can be produced given a set of resources and technology.
- The PPC represents the possible output combinations of two goods that can be produced efficiently, with scarce resources.
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Description
Test your understanding of the economic problem, scarcity, free goods, economic goods, opportunity cost, and Production Possibility Curves with this 15-question multiple choice quiz. Designed in the style of exam questions from the Cambridge IGCSE Economics syllabus, this quiz is perfect for new pupils looking to assess their knowledge in these fundamental economic concepts.
