Question

Economics Basics Pretest

Answer 1

Sure! Here's a simple pretest to assess your basic understanding of economics. Answer the questions to the best of your ability, and then I can provide you with the correct answers and explanations.

### Economics Basics Pretest

1. **What is scarcity in economics?**
a. Unlimited resources
b. Limited resources to meet unlimited wants
c. A surplus of goods
d. High demand for a product

2. **What is opportunity cost?**
a. The cost of producing one more unit
b. The benefits received from a decision
c. The value of the next best alternative forgone
d. The price consumers are willing to pay

3. **Which economic system is characterized by private ownership of resources and voluntary exchange?**
a. Command economy
b. Traditional economy
c. Market economy
d. Mixed economy

4. **What is a positive economic statement?**
a. An opinion on how the economy should work
b. A statement that can be tested and validated
c. A moral judgment about economic policies
d. A subjective view of economic trends

5. **In a competitive market, what typically happens to the price of a good when there is an increase in demand, assuming supply remains constant?**
a. The price decreases
b. The price stays the same
c. The price increases
d. The price fluctuates

6. **Which of the following is NOT a factor of production?**
a. Land
b. Labor
c. Capital
d. Money

7. **What is Gross Domestic Product (GDP)?**
a. The total value of all goods and services produced in a country in a year
b. The income of a country's residents
c. The total sales of a country's products
d. The total expenses of government

8. **Which of the following best defines ‘inflation’?**
a. An increase in the unemployment rate
b. A decrease in consumer spending
c. A sustained increase in the general price level of goods and services
d. A reduction in the money supply

9. **What does the law of supply state?**
a. Higher prices lead to lower supply
b. Higher prices lead to higher supply
c. Supply is always inelastic
d. Supply and demand are unrelated

10. **What is a monopoly?**
a. A market structure with many competitors
b. A market controlled by a single seller
c. A market characterized by oligopolies
d. A situation where prices are set by government regulation

Feel free to answer these questions, and I can provide feedback or explanations!