Test your understanding of the concept of scarcity in economics with this quiz....

Scarcity in economics refers to the limited availability of resources in comparison to the unlimited wants and needs of individuals and society.

Scarcity is a fundamental concept in economics because it necessitates the need for individuals and society to make choices about how to allocate resources to fulfill their unlimited wants and needs.

Scarcity impacts decision-making in economics by forcing individuals and society to prioritize and make trade-offs in allocating resources to different wants and needs, leading to the concept of opportunity cost.

Scarcity = Limited resources and unlimited wants Opportunity cost = The value of the next best alternative foregone Supply and demand = The relationship between the quantity of a good and the price Inflation = The general increase in prices and fall in the purchasing value of money

Capitalism = Private ownership of the means of production Socialism = Public ownership of the means of production Mixed economy = Combination of private and public ownership Communism = Common ownership of the means of production

Perfect competition = Many small firms, identical products, easy entry and exit Monopoly = Single seller with no close substitutes, high barriers to entry Oligopoly = Few large firms, interdependent decision-making, similar or differentiated products Monopolistic competition = Many firms, differentiated products, some control over price