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Exam details
Economics is the study of how individuals, businesses, governments, and societies allocate scarce resources to satisfy unlimited wants. It examines production, distribution, and consumption of goods and services.
Scarcity refers to the fundamental economic problem that resources are limited while human wants are unlimited, forcing choices about resource allocation.
Opportunity cost is the value of the next best alternative forgone when making a choice. It highlights the trade-offs inherent in decision-making.
Positive economics describes 'what is' using facts and testable statements, while normative economics involves 'what ought to be' based on opinions and value judgments.
Microeconomics studies individual markets, households, and firms, while macroeconomics examines the economy as a whole, including growth, inflation, and unemployment.