Trade Offs Opportunity Cost Quiz

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  • 1/8 Questions

    Tradeoffs are options that the consumer has and can choose to take.

    • True
    • False
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About This Quiz

This Trade Offs Opportunity Cost Quiz assesses understanding of economic principles such as tradeoffs, opportunity cost, and production possibilities. It tests key concepts essential for grasping the dynamics of resource allocation and economic growth, making it vital for learners studying economics.

Trade Offs Opportunity Cost Quiz - Quiz

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  • 2. 

    What are fully employed resources?

    • All resources that are gathered for production

    • All resources that are leftover

    • All resources that are used for production

    • All resources that are fully used for production

    Correct Answer
    A. All resources that are fully used for production
    Explanation
    Fully employed resources refer to all the resources that are utilized to their maximum capacity for production purposes. This means that these resources are not leftover or unused, but rather actively utilized in the production process. The term "fully used" implies that there is no wastage or underutilization of these resources, and they contribute effectively to the production output.

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  • 3. 

    Production possibilities are only affected by resources.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Production possibilities are not only affected by resources. Other factors such as technology, skills, and efficiency can also impact production possibilities. For example, advancements in technology can allow for the production of more goods and services with the same amount of resources. Similarly, improvements in skills and efficiency can increase productivity and expand production possibilities. Therefore, the statement that production possibilities are only affected by resources is false.

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  • 4. 

    Define Opportunity Cost. 

    • Cost of what your college fee will be

    • Cost of the product that you have currently bought

    • Cost of the next best option

    • Cost of another option other than your current choice

    Correct Answer
    A. Cost of the next best option
    Explanation
    Opportunity cost refers to the cost of the next best alternative that is forgone when making a decision. It is the value of the benefits or opportunities that could have been gained by choosing an alternative option. In other words, it is the cost of what you give up in order to choose a particular option. This concept is important in decision-making as it helps individuals and businesses evaluate the potential benefits and drawbacks of different choices and make informed decisions based on their opportunity costs.

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  • 5. 

    The different combinations of two products that can be produced if the resources are fully employed is called the___.

    Correct Answer
    Production Possibility Frontier
    PPF
    Explanation
    The Production Possibility Frontier (PPF) represents all the different combinations of two products that can be produced when the available resources are fully employed. It shows the maximum output that can be achieved given the current resources and technology. The PPF is a graphical representation that illustrates the trade-offs between producing one product versus the other, highlighting the concept of opportunity cost. It helps in analyzing the efficiency and feasibility of production decisions and provides a basis for understanding economic growth and resource allocation.

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  • 6. 

    Define three things that the Economic Model does.

    • Predicts an economic condition.

    • Creates an economic condition.

    • Analyzes and economic condition.

    • Solves an economic condition.

    • Worsens an economic condition.

    • Organizes an economic condition.

    Correct Answer(s)
    A. Predicts an economic condition.
    A. Analyzes and economic condition.
    A. Organizes an economic condition.
    Explanation
    The economic model serves three main purposes. Firstly, it predicts an economic condition by using various variables and assumptions to estimate the future state of the economy. Secondly, it analyzes an economic condition by examining the relationships between different economic factors and their impact on the overall economy. Lastly, it organizes an economic condition by providing a structured framework to understand and interpret economic data, allowing policymakers and researchers to make informed decisions and recommendations based on the model's insights.

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  • 7. 

    An ___ shows that the economy is able to produce more.

    Correct Answer(s)
    Economic Growth
    Explanation
    Economic growth refers to an increase in the production of goods and services in an economy over time. It indicates that the economy is capable of producing more output, which can lead to higher living standards, increased employment opportunities, and improved overall well-being. Economic growth is often measured by changes in real GDP (gross domestic product), which reflects the value of all final goods and services produced within a country's borders.

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  • 8. 

    Check all reasons for IDLE resources.

    • Lack of factories

    • Lack of workers

    • Lack of resources

    • Lack of places to get resources

    Correct Answer(s)
    A. Lack of factories
    A. Lack of workers
    A. Lack of resources
    A. Lack of places to get resources
    Explanation
    The correct answer is lack of factories, lack of workers, lack of resources, and lack of places to get resources. This means that when there are idle resources, it could be due to a shortage of factories to utilize those resources, a shortage of workers to operate the factories, a shortage of the actual resources needed for production, or a shortage of places to acquire those resources from. All of these factors contribute to resources being idle and not being fully utilized in the production process.

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  • Current Version
  • Aug 09, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 27, 2014
    Quiz Created by
    Eugenetweet99
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