18 Questions
What represents the value of the next best alternative given up in a decision?
Opportunity cost
In a free market economy, who makes decisions on what goods and services to produce?
Private firms and individuals
What is a key difference between the private and public sectors?
Profit motive
What is an example of an opportunity cost of attending university?
The income that could have been earned if not attending university
What is a characteristic of a planned economy?
Government involvement in decision making
What is a fundamental economic problem?
Scarcity and choice
What is one of the key microeconomic objectives?
Efficiency
What is the term used to describe the benefit or benefits forgone by not selecting a particular alternative?
Opportunity Cost
What are the three big microeconomic questions?
What to produce, How to produce, For whom to produce
What is the term used to describe the basic economic problem of unlimited wants and limited resources?
Scarcity
What are the factors of production?
Land, Labour, Capital, and Entrepreneurial Ability
What is the branch of economics that studies the behavior and decision-making process of individual economic units such as households and firms?
Microeconomics
What is the primary focus of the social science of economics?
The examination of individual and societal choices influenced by scarcity
Which economist defined economics as 'an inquiry into the nature and causes of the wealth of nations'?
Adam Smith
What is the underlying assumption that influences the choices individuals and societies make in economics?
Scarcity of resources
Which of the following is NOT a definition of economics?
The study of the planet's natural resources
Who defined economics as a study of mankind in the ordinary business of life?
Alfred Marshall
What is the primary difference between microeconomics and macroeconomics?
Microeconomics examines individual markets, while macroeconomics examines the entire economy
Understanding opportunity cost in economics, including what is given up when making a choice, and its relation to decision making. Learn how to calculate opportunity cost with examples.
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