Basic Economic Concepts
Which of the following best describes the fundamental problem of economics?
Suppose you have $20. You can either buy a book or a video game. If you buy the book, what is the opportunity cost?
What does the Production Possibilities Curve (PPC) primarily illustrate?
Country A can produce either 100 cars or 150 bushels of wheat with its resources. Country B can produce either 75 cars or 50 bushels of wheat. If both countries are producing at full potential, which country has a comparative advantage in producing cars?
Country X can produce 20 units of steel or 30 units of textiles. Country Y can produce 10 units of steel or 20 units of textiles. What are the potential gains from trade if each country specializes in the product where they have a comparative advantage?
If there is an increase in both the supply and demand for a product, what will happen to the equilibrium quantity?
What does opportunity cost represent?
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According to the law of supply, what happens to the quantity supplied of a good when its price increases?
Suppose there's a simultaneous increase in the demand for electric cars due to rising gas prices and a decrease in the supply of electric cars due to a shortage of batteries. What is the likely effect on the equilibrium price and quantity of electric cars?
How would the Production Possibilities Curve (PPC) likely shift if there's a significant technological improvement in the production of all goods?