Basic Economic Concepts – Multiple Choice Questions (MCQs)

1. 1. What is scarcity in economics?

   • A. A situation where resources are unlimited
   • B. A situation where human wants exceed the available resources
   • C. A situation where there is a surplus of goods
   • D. A situation where prices are very low

2. 2. What is opportunity cost?

   • A. The total cost of producing a good
   • B. The cost of the next best alternative forgone when making a choice
   • C. The cost of all resources used in production
   • D. The selling price of a good

3. 3. What is microeconomics?

   • A. The study of the economy as a whole
   • B. The study of individual economic agents and markets
   • C. The study of international trade
   • D. The study of government budgets

4. 4. What is macroeconomics?

   • A. The study of individual economic agents and markets
   • B. The study of specific industries
   • C. The study of the economy as a whole
   • D. The study of consumer behavior

5. 5. What is demand in economics?

   • A. The desire for a good or service
   • B. The ability to pay for a good or service
   • C. The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period
   • D. The total need for a good or service

6. 6. What is supply in economics?

   • A. The total availability of a good or service
   • B. The quantity of a good or service that producers are willing and able to offer for sale at various prices during a given period
   • C. The cost of producing a good or service
   • D. The amount of a good or service that is actually sold

7. 7. What determines the equilibrium price and quantity in a market?

   • A. Only demand
   • B. Only supply
   • C. The interaction of demand and supply
   • D. Government regulations

8. 8. What is elasticity of demand?

   • A. The responsiveness of quantity demanded to a change in price
   • B. The total quantity demanded at a given price
   • C. The slope of the demand curve
   • D. The relationship between income and demand

9. 9. What is inflation?

   • A. A general increase in the price level in an economy
   • B. A decrease in the value of money
   • C. A rapid increase in economic growth
   • D. A decrease in unemployment

10. 10. What is Gross Domestic Product (GDP)?

    • A. The total value of goods and services exported by a country
    • B. The total income of all residents of a country
    • C. The total market value of all final goods and services produced within a country's borders in a specific time period
    • D. The total amount of money in circulation in a country

11. 11. What is per capita income?

    • A. The total income of a country
    • B. The average income earned per person in a given area in a specified year
    • C. The income of the richest individuals in a country
    • D. The total savings of a country

12. 12. What is economic growth?

    • A. A sustained increase in a country's productive capacity
    • B. A temporary increase in production
    • C. An increase in the population of a country
    • D. A decrease in unemployment