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Introduction to Economics Quiz: Test Your Fundamentals

Ready to dive into introduction to economics online practice?

Editorial: Review CompletedCreated By: Bukunmi OseniUpdated Aug 24, 2025
Difficulty: Moderate
2-5mins
Learning OutcomesCheat Sheet
Paper cut style icons of graphs coins books and question marks on sky blue background for economics quiz

This Introduction to Economics online practice quiz helps you review core ideas like supply and demand, opportunity cost, and fiscal policy. Use it to spot gaps before an exam and build speed with quick questions. For a preview, see sample questions and answers , and keep going with more practice .

Scarcity means that resources are limited relative to wants, leading to trade-offs in choices.
True
False
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Opportunity cost is best described as the value of the next best alternative foregone.
True
False
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Which point on a production possibilities curve represents an unattainable output combination given current resources and technology?
The curve's midpoint
A point inside the curve
A point on the curve
A point outside (beyond) the curve
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In a competitive market, a decrease in the price of a good, ceteris paribus, will cause the quantity demanded to increase.
True
False
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Which event would shift the demand curve for coffee to the right, ceteris paribus?
An increase in consumers' incomes when coffee is a normal good
A decrease in the number of coffee consumers
A decrease in the price of coffee
An improvement in coffee harvesting technology
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Which statement correctly describes marginal analysis for decision-making?
Ignore sunk costs and choose the option with the highest total benefit
Choose the option with the lowest total cost regardless of benefits
Choose the option with the highest average benefit
Choose the option where marginal benefit is at least as great as marginal cost
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A price floor set above the equilibrium price leads to a surplus in the market.
False
True
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Which change would increase the equilibrium price of oranges?
A rightward shift of supply with no change in demand
A leftward shift of supply with no change in demand
A rightward shift of both supply and demand by the same amount
A leftward shift of demand with no change in supply
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Which good is most likely to have inelastic demand in the short run?
Luxury vacations
Designer handbags
Insulin for diabetics
Restaurant meals
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If the cross-price elasticity of demand between tea and coffee is positive, the goods are complements.
True
False
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The government spending multiplier in a simple model with no crowding out is larger than the tax multiplier in absolute value.
True
False
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In perfect competition, firms are price takers and face a horizontal demand curve at the market price.
True
False
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A monopolist maximizes profit by producing where marginal revenue equals marginal cost and then charging the price on the demand curve at that quantity.
False
True
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Which statement about oligopoly is accurate?
Entry is free and easy in the long run
There are many small firms with no market power
Firms are interdependent in their decision-making
Products are always homogeneous
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In a standard Prisoner's Dilemma, mutual cooperation is the dominant strategy for both players.
True
False
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A Giffen good is defined by demand increasing when its price rises due to a strong negative income effect outweighing the substitution effect.
False
True
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The Laffer curve suggests that beyond some tax rate, further increases in the rate can reduce total tax revenue.
False
True
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Purchasing power parity posits that identical goods should cost the same across countries after accounting for exchange rates in the long run.
True
False
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The short-run Phillips curve illustrates an inverse relationship between inflation and unemployment, holding expectations constant.
False
True
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A binding quota that limits quantity below the competitive equilibrium creates scarcity rents and deadweight loss.
False
True
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0

Study Outcomes

  1. Understand Core Economic Concepts -

    Recognize and define key terms such as scarcity, opportunity cost, and market equilibrium to build a strong foundation in economics.

  2. Analyze Supply and Demand Dynamics -

    Examine how price changes and market forces impact supply and demand curves and influence consumer and producer behavior.

  3. Apply Production and Distribution Principles -

    Demonstrate how resources are allocated in production processes and how goods and services are distributed within an economy.

  4. Interpret Economic Data -

    Read and evaluate basic charts, graphs, and tables to draw meaningful conclusions about economic trends.

  5. Evaluate Quiz Responses -

    Use introduction to economics questions and answers to identify areas of strength and address knowledge gaps effectively.

  6. Reinforce Learning Through Practice -

    Engage with a free economics quiz online to solidify understanding and track progress in fundamental economic principles.

Cheat Sheet

  1. Scarcity and Choice -

    Scarcity is the fundamental concept that resources are limited while wants are infinite, forcing individuals and societies to make choices (Mankiw, 2018). Remember the mnemonic "W.I.S.E." (Wants, Items, Scarcity, Evaluate) to recall that evaluating wants against limited items is key. These basics will solidify your confidence during your introduction to economics online practice.

  2. Opportunity Cost -

    Opportunity cost measures the value of the next best alternative foregone, often expressed as OC = what you give up / what you gain (Khan Academy). For example, if studying for an exam means skipping a $20 shift, the opportunity cost is $20. Mastering this formula is crucial for both basic economics quizzes and introduction to economics questions and answers.

  3. Supply and Demand Equilibrium -

    Supply and demand curves intersect at equilibrium where Qd = Qs; if Qd = a - bP and Qs = c + dP, solve for P* = (a - c)/(b+d) to find market price. Use the phrase "Down with Demand, Up with Supply" to visualize shifts. Recognizing how shifts affect equilibrium will ace your free economics quiz online.

  4. Marginal Analysis & Diminishing Utility -

    The law of diminishing marginal utility states that MU = ΔTU/ΔQ decreases as consumption increases (University of Chicago Press). Picture that first slice of pizza brings big joy, but the fifth is just "meh." Applying marginal analysis helps you optimize decisions and shines in any basic economics quiz.

  5. Comparative Advantage & Trade -

    Comparative advantage occurs when a party can produce at a lower opportunity cost, underpinning gains from trade (Ricardo model). For instance, if Country A sacrifices 2 cars for 1 computer and Country B sacrifices 3 cars for 1 computer, A has the comparative advantage in computers. This key principle often appears in introduction to economics questions and answers and will elevate your quiz performance.

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