Master the Basics of Economics
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Questions and Answers

Define economics.

  • The study of how individuals and societies make choices about the use of unlimited resources to satisfy their scarce wants.
  • The study of how individuals and societies make choices about the use of scarce resources to satisfy their unlimited wants. (correct)
  • The study of how individuals and societies make choices about the use of unlimited resources to satisfy their unlimited wants.
  • The study of how individuals and societies make choices about the use of scarce resources to satisfy their scarce wants.

    • Define scarcity.

  • The unlimited availability of resources to satisfy unlimited wants.
  • The limited availability of resources to satisfy limited wants.
  • The limited availability of resources to satisfy unlimited wants. (correct)
  • The unlimited availability of resources to satisfy limited wants.

    • Define the 4 factors of production.

  • Land, labor, money, and entrepreneurship.
  • Land, labor, capital, and entrepreneurship. (correct)
  • Land, labor, money, and management.
  • Land, labor, capital, and management.

    • Define entrepreneur.

    <p>A person who starts a business.</p> Signup and view all the answers

    Define opportunity cost.

    <p>The cost of an opportunity that is given up.</p> Signup and view all the answers

    Define efficiency.

    <p>The ability to produce goods and services using fewer resources.</p> Signup and view all the answers

    Define incentives. How do they motivate people.

    <p>Rewards or penalties that motivate people to take certain actions.</p> Signup and view all the answers

    What is the main incentive for a business.

    <p>Profit</p> Signup and view all the answers

    Which of the following best describes a Production Possibilities Graph?

    <p>A visual representation of the relationship between two goods that an economy can produce given its resources and technology.</p> Signup and view all the answers

    How can an economy increase its production possibilities?

    <p>By investing in capital goods and improving technology.</p> Signup and view all the answers

    How does a Production Possibilities Graph show opportunity cost?

    <p>By illustrating the trade-offs between producing one good over another.</p> Signup and view all the answers

    What are the 3 key economic questions?

    <p>What to produce, how to produce, and for whom to produce.</p> Signup and view all the answers

    What is market failure?

    <p>When the allocation of goods and services by a free market is not efficient or fair.</p> Signup and view all the answers

    What does a Production Possibilities Graph show?

    <p>The relationship between the production of two goods</p> Signup and view all the answers

    How can an economy increase its production possibilities?

    <p>By increasing the availability of resources</p> Signup and view all the answers

    How does a Production Possibilities Graph show opportunity cost?

    <p>By representing the trade-offs between producing different goods</p> Signup and view all the answers

    What are the 3 key economic questions?

    <p>How to increase production, how to allocate resources, how to distribute goods</p> Signup and view all the answers

    Define market failure.

    <p>When the free market fails to allocate resources efficiently</p> Signup and view all the answers

    What does a Production Possibilities Graph show?

    <p>The relationship between production possibilities</p> Signup and view all the answers

    How can an economy increase its production possibilities?

    <p>By increasing the efficiency of resource use</p> Signup and view all the answers

    What does a Production Possibilities Graph show about opportunity cost?

    <p>It shows the cost of producing one good in terms of the other</p> Signup and view all the answers

    What are the 3 key economic questions?

    <p>What to produce, how to produce, and for whom to produce</p> Signup and view all the answers

    What is market failure?

    <p>When the market is unable to allocate resources efficiently</p> Signup and view all the answers

    Which of the following best describes free enterprise?

    <p>An economic system where individuals and businesses have the freedom to own and operate their own businesses</p> Signup and view all the answers

    What is market failure?

    <p>When the market is unable to allocate resources efficiently</p> Signup and view all the answers

    How do consumers tell the government and businesses what they want?

    <p>By buying or not buying certain products</p> Signup and view all the answers

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