Practice Questions
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If Sarah has $50 to spend and she decides to buy a new pair of shoes instead of going to a concert, what is the opportunity cost of her decision?
The opportunity cost is what you give up when you make a choice. Other options are incorrect because This answer confuses spending with opportunity co...
Which economic system primarily relies on the forces of supply and demand to allocate resources without centralized control?
A market economy uses supply and demand to decide what to make and sell. Other options are incorrect because In a command economy, the government make...
In a market where the demand for a product increases while supply remains constant, what is the likely outcome regarding the product's price, considering the concept of opportunity cost?
When more people want a product but there is the same amount available, the price goes up. Other options are incorrect because Some might think that m...
In an economy facing scarcity, if a government decides to allocate more resources to healthcare rather than education, what is the opportunity cost of this decision in terms of supply and demand principles?
When the government spends more on healthcare, it has less money for education. Other options are incorrect because Some might think better healthcare...
In the context of a production possibilities frontier, which scenario best illustrates the concept of opportunity cost in consumer choice?
When a person chooses to buy a car instead of saving for a vacation, they give up the vacation. Other options are incorrect because This option focuse...
What does the concept of scarcity in economics primarily refer to?
Scarcity means we have limited resources, like money or materials, but our wants are endless. Other options are incorrect because This option suggests...
What does the term 'trade-off' refer to in economics?
A trade-off happens when you choose one thing over another. Other options are incorrect because This answer suggests that a trade-off is about all cos...
If Sarah has $50 to spend and she decides to buy a new pair of shoes instead of going to a concert, what is the opportunity cost of her decision?
The opportunity cost is what you give up when you make a choice. Other options are incorrect because Some might think the money spent on shoes is the ...
Resource allocation in economics is to trade-offs as prioritizing health research is to what?
When we focus on health research, we must manage different health problems. Other options are incorrect because This suggests we should cut money from...
What is the most likely underlying cause for a society choosing to allocate more resources to healthcare during a pandemic, rather than education?
During a pandemic, people's health is at risk. Other options are incorrect because This idea suggests that healthcare is always easier to get than edu...
A city government decides to allocate a portion of its budget to build a new park instead of funding road repairs. Which category best describes this economic choice and why?
A trade-off happens when you give up one thing for another. Other options are incorrect because Opportunity cost is what you miss out on when you make...
In economics, the concept that refers to the necessity of prioritizing resource allocation because utilizing resources for one purpose means they cannot be used for another is known as ____.
Opportunity cost is about what you give up when you choose one option over another. Other options are incorrect because Scarcity means there are not e...
Which of the following statements accurately reflect the concept of fundamental economic choices? (Select all that apply)
When we decide how to use our resources, we often have to give up one thing to get another. Other options are incorrect because This statement suggest...
Why is understanding trade-offs essential in making economic choices?
Understanding trade-offs helps us decide how to use our limited resources. Other options are incorrect because This idea suggests we can use resources...
A city is faced with a sudden outbreak of a virus, and its healthcare resources are limited. The city must decide whether to allocate funds to increase hospital capacity or to invest in a public health campaign to educate the population on preventive measures. What fundamental economic choice is the city making, and how does this reflect the concept of trade-offs in resource allocation?
The city is choosing to focus on immediate healthcare needs. Other options are incorrect because This answer suggests the city can do both equally, wh...
If a community decides to allocate more resources to healthcare instead of education, what economic principle are they demonstrating?
When a community chooses to spend more on healthcare, they are making a trade-off. Other options are incorrect because Some people might think resourc...
Order the steps that illustrate how a society makes fundamental economic choices when faced with limited resources: A) Identify competing wants and needs, B) Allocate resources to maximize satisfaction, C) Evaluate the trade-offs involved, D) Decide on the most efficient use of resources.
First, a society must identify what people want and need. Other options are incorrect because This order starts with evaluating trade-offs, but you ne...
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