Basic Economic Concepts

Because choosing one thing means giving up something else due to scarcity.

Because decisions must always align with international trade agreements.

Because all decisions involve monetary transactions that affect income levels.

Because it is required by law for every financial decision made by firms or governments.

Oligopoly

Perfect competition

Monopoly

Monopolistic competition

Choice and scarcity are unrelated concepts.

Scarcity necessitates making choices among competing alternatives.

Scarcity eliminates the need for making choices.

Choice leads to an abundance of resources.

Monopolistic competition

Monopoly

Oligopoly

Perfect competition

Soil in a fertile agricultural region.

Sunlight.

Air.

Freshwater in a drought-stricken region.

A company increases its product price due to higher consumer demand for its goods.

A country has only a limited amount of oil reserves but many industries competing for that oil.

An individual decides to save more money after receiving a pay raise at work.

A market reaching equilibrium when supply equals demand for a product at a certain price level.

It can boost domestic consumption by increasing citizens' purchasing power abroad.

It can lead to a decrease in exports due to higher prices for foreign buyers.

It could reduce the cost of imports, encouraging domestic consumers to buy more foreign goods.

It may increase both imports and exports due to more stable economic relations.

A stronger domestic currency relative to others may lead to lower reported revenue from overseas operations when translated back into home tender.

Weakness in domestic currency valuations automatically translates into higher revenues when converting foreign earnings back home.

Enhanced exchange rate stability boosts profits by streamlining cost management across different markets.

Exchange rate volatility has little to bear upon financial reporting since most transactions are hedged against risk via financial instruments.

A central bank prints money causing hyperinflation

A government chooses to fund healthcare instead of subsidizing space exploration

An investor buys stock expecting high returns during economic expansion

A company outsources labor to reduce production costs without affecting quality

Decrease taxes and increase interest rates.

Decrease government spending and increase interest rates.

Increase taxes and decrease interest rates.

Increase government spending and decrease interest rates.