What is opportunity cost?

The next best alternative given up when making a decision

A cost that has already been incurred and cannot be recovered

If you spend $20 on a movie ticket instead of buying a book, what is your opportunity cost?

The book - which includes the enjoyment + knowledge you could have gained

Why should sunk costs not affect future decision-making?

Because they cannot be recovered

What is one advantage of a mixed economy?

Balances private freedom with government regulation

What is a traditional economy based on?

Customs, traditions, and barter

What is one advantage of a market economy?

Efficient allocation of resources and innovation driven by competition

What is one advantage of a traditional economy?

Strong sense of community and stability

Which of the following is an example of scarcity?

A student choosing between studying and going out with friends

What is scarcity in economics?

A lack of resources to satisfy all wants and needs

What is a disadvantage of a command economy?

Lack of efficiency and consumer choice

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Intro to Econ

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Questions 14

Answers

1
What is opportunity cost?
The amount of money spent on an item
The next best alternative given up when making a decision
The total cost of producing something
A cost that doesn’t change
2
What is a sunk cost?
A cost that varies with production levels
A cost that has already been incurred and cannot be recovered
The price you pay for a product
The cost of an alternative option
3
If you spend $20 on a movie ticket instead of buying a book, what is your opportunity cost?
The popcorn at the movie theater
The book - which includes the enjoyment + knowledge you could have gained
Nothing—opportunity cost doesn’t apply here
The $20 you spent
4
Which economic system combines private enterprise with government regulation?
Command economy
Market economy
Mixed economy
Traditional economy
5
Why should sunk costs not affect future decision-making?
Because they are opportunity costs
Because they cannot be recovered
Because they will always increase
Because they are not important
6
What is one advantage of a mixed economy?
No government intervention at all
Complete elimination of poverty
Balances private freedom with government regulation
Resources are allocated solely based on tradition
7
What is a traditional economy based on?
Advanced technology
Free market competition
Centralized government planning
Customs, traditions, and barter
8
In a command economy, who decides what goods and services are produced?
A mix of private and public sectors
Individual businesses
The government
Consumers
9
What is one advantage of a market economy?
Efficient allocation of resources and innovation driven by competition
Focus on maintaining traditions
Centralized decision-making ensures stability
Economic stability without fluctuations
10
What is one advantage of a traditional economy?
Unlimited growth potential
High levels of innovation and technology
Equal distribution of wealth
Strong sense of community and stability
11
Which of the following is an example of scarcity?
Unlimited energy from a renewable source
A store having excess inventory
A student choosing between studying and going out with friends
Everyone in town getting free pizza
12
What is scarcity in economics?
Resources that are not valuable
A lack of resources to satisfy all wants and needs
The ability to produce everything we want
Having unlimited resources
13
What is a disadvantage of a command economy?
Unstable social structures
Lack of efficiency and consumer choice
Overproduction of goods
Strong reliance on private businesses
14
Which type of economy is characterized by private ownership and free markets?
Market economy
Traditional economy
Command economy
Mixed economy

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