What is a fundamental economic problem faced by all societies?
A) Scarcity of resources
B) High unemployment rates
C) Low inflation
D) Decreased supply of goods
Which of the following is NOT considered one of the basic economic problems?
A) What to produce
B) How to produce
C) Who to produce for
D) How to distribute taxes
The problem of scarcity in economics refers to:
A) A shortage of money
B) A lack of resources relative to human wants
C) The difficulty of managing economic systems
D) Inefficient government spending
How can governments solve the problem of allocation of resources?
A) By increasing taxes on essential goods
B) Through central planning or market mechanisms
C) By reducing interest rates
D) By distributing wealth equally
The solution to the problem of “what to produce” can be found through:
A) Government intervention only
B) Market demand and supply
C) Increasing taxes
D) Strict regulation on wages
What does the problem of “how to produce” address?
A) The method of producing goods and services
B) The distribution of resources
C) The decision on which resources to distribute
D) The problem of scarcity
In the context of the basic economic problems, the question “for whom to produce” relates to:
A) Deciding how to distribute goods and services
B) Choosing the target market
C) Selecting production techniques
D) Allocating resources efficiently
How does a market economy address the basic economic problems?
A) By relying on government intervention
B) Through central planning by the state
C) By allowing market forces like supply and demand to determine production and distribution
D) By increasing the money supply
What is the role of prices in addressing the basic economic problems?
A) Prices regulate the quantity of goods produced and distributed
B) Prices increase the cost of production
C) Prices are controlled by the government to avoid scarcity
D) Prices do not affect production decisions
Which solution helps address the problem of resource scarcity in an economy?
A) Free market systems with limited government intervention
B) Strict regulation of goods produced
C) Encouraging monopolies to control supply
D) Increasing production through heavy subsidies
What is the primary goal of economic systems in addressing the basic economic problems?
A) To minimize inflation
B) To satisfy unlimited wants with limited resources
C) To achieve political stability
D) To increase taxation rates
The problem of “how to allocate resources” can be solved by:
A) Establishing a monopoly
B) Relying on government price controls
C) Using market forces and competition
D) Reducing government spending
What does “market failure” refer to in terms of basic economic problems?
A) When the market efficiently allocates resources
B) When supply and demand perfectly balance each other
C) When markets fail to allocate resources efficiently, leading to misallocation
D) When taxes are high and government spending is low
Which economic system primarily relies on government decisions to address the basic economic problems?
A) Traditional economy
B) Market economy
C) Mixed economy
D) Command economy
The solution to the problem of “what to produce” in a command economy is determined by:
A) The government or central authority
B) Consumers’ demand
C) Producers’ interests
D) International organizations
In a market economy, the basic economic problem of scarcity is addressed by:
A) Government regulation of prices
B) Individuals and firms making decisions based on supply and demand
C) Creating more government jobs
D) Redistributing wealth among citizens
Which of the following is a possible solution to the problem of “who to produce for”?
A) Equitable distribution of income
B) Price controls on essential goods
C) Government rationing
D) Encouraging monopolies
How can the problem of “how to produce” be addressed in a mixed economy?
A) By increasing state ownership of production
B) By relying on market forces and private enterprises
C) By setting strict government production quotas
D) By ignoring consumer preferences
Which of the following is a solution to the problem of overproduction in a market economy?
A) Price regulation
B) Increase in subsidies for producers
C) Market-based adjustments to supply
D) Government intervention to restrict competition
What is one of the primary challenges in addressing the basic economic problems?
A) Ensuring a balanced government budget
B) Allocating scarce resources to meet unlimited wants
C) Reducing international trade barriers
D) Increasing public sector spending
How can an economy solve the problem of scarcity?
A) By limiting the number of products available
B) By finding more resources or improving efficiency
C) By reducing taxes
D) By restricting demand for goods
Which of the following is NOT a solution to the problem of scarcity?
A) Efficient use of resources
B) Technological innovation
C) Limiting the number of people in the economy
D) Creating new resources or increasing resource availability
The problem of “who gets the goods” is solved in which economic system through consumer choice?
A) Market economy
B) Command economy
C) Mixed economy
D) Traditional economy
The question “for whom to produce” is generally answered in a market economy by:
A) Government regulations
B) Price systems and income distribution
C) Central planning by the state
D) Increasing taxes on wealthier consumers
In economics, the term “opportunity cost” refers to:
A) The cost of production
B) The value of the next best alternative forgone
C) The total cost of an economic transaction
D) The expense incurred by businesses in market operations
What is the impact of technological progress on addressing the basic economic problems?
A) It increases the cost of production
B) It reduces the efficiency of resource use
C) It leads to the more efficient use of resources and production
D) It causes an oversupply of goods
