Opportunity Cost and Capital Quiz

What is an example of capital needed to start a tailoring or garment making business?

In comparison to the U.S. free enterprise system, what is a characteristic of the economy of China?

What term is used to describe the idea that resources are limited in economics?

Jenny wants to buy a computer and a new television before she leaves for college. She only has enough money to purchase the computer. Which of the following is the opportunity cost of purchasing the computer?

What is a characteristic of the economy of China compared to the U.S. free enterprise system?

What term is used to describe the concept of limited resources in economics?

What is the opportunity cost of Jenny purchasing the computer?

Capital for Tailoring Business

Initial capital can include sewing machines, fabric, tools, and workspace.
Additional expenses may cover licensing, marketing, and operating overhead.

Economy of China vs. U.S. Free Enterprise

China's economy has a significant level of government control compared to the U.S. emphasis on free market principles.
The Chinese model incorporates state-owned enterprises alongside private ownership.

Limited Resources in Economics

The term "scarcity" describes the idea that resources available are limited compared to the demand for those resources.

Opportunity Cost

Opportunity cost refers to the value of the next best alternative foregone when a choice is made.
In Jenny's case, the opportunity cost of purchasing the computer is the value of the television she must forgo.

Additional Characteristic of China's Economy

China's economy is characterized by a mix of capitalism and central planning, contrasting sharply with the U.S. system that promotes individual entrepreneurial freedom.

Reiteration of Limited Resources Term

Scarcity is the economic term that encapsulates the concept of limited resources available for varied uses.

This quiz tests your understanding of opportunity cost and capital. In the first question, you'll need to identify the opportunity cost of purchasing a computer. In the second question, you'll be asked to identify the capital required to start a tai...