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Quizzes > Business & Finance > Finance & Economics

Scarcity Questions Quiz: Think You Can Ace It?

Explore questions about scarcity and prove your economic savvy!

Difficulty: Moderate
2-5mins
Learning OutcomesCheat Sheet
Paper art illustration for scarcity knowledge quiz on a sky blue background

This quiz helps you work through scarcity questions, using real-life trade-offs to show how limited resources meet unlimited wants. Practice concepts like the economizing problem, get instant feedback, and spot gaps before your economics final - or just sharpen your thinking for class.

What does scarcity refer to in economics?
Limited resources versus unlimited wants
Equal distribution of goods among people
A constant supply of all goods
Unlimited resources to satisfy limited wants
Scarcity arises because society has limited resources but unlimited wants, forcing choices about allocation. It is a fundamental concept in economics that leads to trade-offs. When resources are scarce, people must decide which wants to satisfy. For more information, see .
Which of the following is an example of a scarce resource?
Sunlight at noon
Table salt at a dining table
Water in a desert region
Air in a well-ventilated room
In a desert, water is limited relative to demand, making it a scarce resource. Scarce resources are not always rare everywhere but are insufficient in some contexts. In contrast, air and sunlight are abundant in most settings. See .
What is the definition of opportunity cost?
The highest-valued alternative forgone
The benefit gained from a chosen alternative
The total cost of production for a good
Costs that have already been incurred and cannot be recovered
Opportunity cost represents the value of the next best alternative that is given up when a choice is made. It is central to economic decision-making because resources are scarce. It helps illustrate trade-offs in resource allocation. Learn more at .
Which of the following is NOT considered a factor of production?
Money
Land
Capital
Labor
The classical factors of production are land, labor, capital, and entrepreneurship. Money is a medium of exchange, not a productive input itself. While money can finance production, it does not directly produce goods or services. See .
When a resource becomes more scarce, what is the typical market outcome?
Prices decrease
Prices remain constant
Prices drop to zero
Prices increase
Scarcity means there is less of a resource available than people want. When supply falls or demand rises under scarcity, prices typically increase. Higher prices ration scarce goods among buyers. For more detail, see .
What does a point inside the production possibilities frontier (PPF) indicate?
Inefficient use of resources
Zero opportunity cost
Maximum productive efficiency
Economic growth
Points inside the PPF represent combinations of goods that are produced with underutilized or inefficiently used resources. This means the economy could produce more of one or both goods without sacrificing production. Efficient production lies on the frontier itself. See .
What is marginal utility?
Additional satisfaction from one more unit consumed
Satisfaction lost when consumption decreases
Total satisfaction from all units consumed
Average satisfaction per unit consumed
Marginal utility measures the additional satisfaction gained from consuming one more unit of a good or service. It often diminishes as consumption increases, illustrating the law of diminishing marginal utility. Understanding this helps explain consumer choice. Learn more at .
Which event would shift a society's PPF outward?
An increase in unemployment
A major natural disaster
A decrease in labor supply
Technological improvement
An outward shift of the PPF indicates economic growth, which can result from technological improvements that increase productivity. Natural disasters or reduced labor supply would shift the PPF inward. More employment alone does not shift the frontier, it moves production toward the curve. See .
A movement along a PPF curve represents which of the following?
A reallocation of resources between two goods
A shift of the entire PPF due to growth
Technological change in one sector
A change in resource availability
Moving along the PPF shows how resources are reallocated between two different goods, reflecting opportunity costs. Shifts of the entire PPF would require changes in resource quantity or technology. Technology in one sector would tilt rather than move along the curve. More details at .
Which scenario best illustrates opportunity cost?
Buying an item on sale
Choosing to watch a movie instead of studying
Finding money on the street
Receiving a birthday gift
Opportunity cost is demonstrated when you give up the next best alternative - in this case, studying - to watch a movie. Finding money or receiving a gift involves no trade-off of alternatives. Purchasing on sale does not illustrate giving up something valuable. See .
In the tragedy of the commons, the primary problem arises because:
Governments allocate resources inefficiently
Private property eliminates scarcity
Individuals overuse a shared scarce resource
Technological advances reduce costs
The tragedy of the commons occurs when individuals acting in their own interest overconsume a shared limited resource, leading to depletion. Without exclusive property rights or regulation, no one bears full cost of overuse. This demonstrates how scarcity can lead to collective action problems. Read more at .
Which of the following is a nonrenewable scarce resource?
Timber from sustainable forestry
Fish stocks
Solar energy
Crude oil
Crude oil takes millions of years to form and is not replenished on a human timescale, making it a nonrenewable resource. Solar energy and sustainably managed timber can be replenished. Fish stocks can renew under proper management but are at risk if overfished. More info at .
If the price of steel (an input) increases significantly, what happens in the short run to the supply of cars?
The supply curve shifts to the left
Quantity supplied moves up along the curve
The supply curve shifts to the right
There is no change in supply
An increase in input costs like steel raises production costs, causing the supply curve for cars to shift left (a decrease in supply). A movement along the curve would reflect a price change for cars, not input costs. No change would imply costs remained constant. See .
Which concept explains why countries specialize in producing goods where they have a lower opportunity cost?
Diminishing returns
Absolute advantage
Supply and demand
Comparative advantage
Comparative advantage occurs when a country can produce a good at a lower opportunity cost than others, leading to specialization and trade benefits. Absolute advantage refers to producing more with the same resources but does not explain trade patterns. See .
An economy's linear PPF runs from 0 cars & 100 computers to 50 cars & 0 computers. What is the opportunity cost of producing one additional car?
0.5 computers
2 computers
50 computers
1 computer
A linear PPF implies constant opportunity cost. Moving from 0 cars to 50 cars costs 100 computers, so each additional car costs 100/50 = 2 computers. This reflects the slope of the PPF. For more detail, see .
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Study Outcomes

  1. Define Economic Scarcity -

    Readers will be able to articulate how scarcity refers to the situation in which limited resources must satisfy unlimited wants and explain its significance in economics.

  2. Identify Real-World Examples -

    Readers will recognize practical scenarios illustrating scarcity is a situation in which choices must be made and resources are constrained.

  3. Analyze Scarcity Questions -

    Readers will critically assess quiz prompts about scarcity questions and determine the correct application of economic principles.

  4. Apply Decision-Making Concepts -

    Readers will use their understanding of scarcity to evaluate trade-offs and opportunity costs in hypothetical situations.

  5. Evaluate Personal Knowledge -

    Readers will gauge their grasp of questions about scarcity and identify areas for further study or review.

Cheat Sheet

  1. Core Definition of Scarcity -

    Scarcity refers to the situation in which limited resources must meet unlimited wants, making choices inevitable. Think of it as "SIR" (Scarcity Is Real) to remember that every economy faces finite inputs chasing endless demands. When tackling scarcity questions, this bedrock definition guides all analyses.

  2. Opportunity Cost and Trade-Offs -

    Opportunity cost equals the value of the next best alternative foregone (OC = Benefit of Best Forgone Option), illustrating the true price of every decision. For example, choosing to study economics for an extra hour means losing one hour you could've worked or relaxed. Mastering questions about scarcity often hinges on spotting and calculating these invisible costs.

  3. Production Possibilities Frontier (PPF) -

    The PPF curve shows maximum output combinations of two goods given fixed resources, highlighting trade-offs and efficiency. Picture a "guns vs. butter" graph: moving along the curve means sacrificing some butter to produce more guns. Scarcity questions frequently ask you to identify points of inefficiency (inside the curve) or growth (shifting the curve outward).

  4. Diminishing Marginal Utility -

    As you consume more units of a good, the additional satisfaction (marginal utility) declines - this principle underpins consumer choice under scarcity. Imagine the first slice of pizza tastes amazing, but by slice five you're less excited; that drop drives how much you'll pay. Remember "More Means Less Joy" to recall that each extra unit yields diminishing gains.

  5. Price Mechanism and Resource Allocation -

    Prices serve as signals to ration scarce goods, balancing supply and demand at market equilibrium. When a product is scarce relative to demand, its price rises, incentivizing producers and discouraging excess consumption. Spotting how price changes answer questions about scarcity is crucial for acing scarcity is a situation in which queries.

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