Fundamental Economic Concepts
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Questions and Answers

What does economics primarily study?

  • The history of money
  • The weather's impact on agriculture
  • The stock market's daily fluctuations
  • How societies manage scarce resources (correct)

In economics, what is 'scarcity'?

  • The availability of free goods and services
  • A temporary shortage of a specific product
  • A surplus of goods in the market.
  • The limitation of resources in relation to wants (correct)

What is 'opportunity cost' in economics?

  • The cost of producing a good or service
  • The value of the next best alternative forgone (correct)
  • The total expenses incurred in a business venture
  • The price of a product on the open market

What is the basic function of a market in an economy?

<p>To facilitate the exchange of goods and services (D)</p> Signup and view all the answers

What does the term 'demand' refer to in economics?

<p>Consumers' desire and ability to purchase goods (B)</p> Signup and view all the answers

Flashcards

Economics

The study of how societies allocate scarce resources to satisfy unlimited wants and needs.

Scarcity

A situation where unlimited wants exceed the limited resources available to fulfill those wants.

Opportunity Cost

The value of the next best alternative that must be given up when making a choice.

Command Economy

A system in which decisions about production and allocation are made by the government.

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Market Economy

A system in which decisions about production and allocation are made by individual producers and consumers.

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