Economics Without the Math

General Knowledge · 10 questions

How money, value and incentives work, with not a single calculation.

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1. What do economists call the value of the best option you gave up?

   1. Opportunity cost
   2. Sunk cost
   3. Marginal utility
   4. Fixed overhead
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   A) Opportunity cost

2. Which concept says money already spent and unrecoverable should not sway new decisions?

   1. Inflation
   2. Leverage
   3. Arbitrage
   4. Sunk cost
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   D) Sunk cost

3. In the simplest terms, what does inflation describe?

   1. Interest rates going up
   2. Production falling off
   3. Money losing purchasing power
   4. Unemployment rising
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   C) Money losing purchasing power

4. What is it called when everyone overuses a shared resource until it is exhausted?

   1. Economies of scale
   2. The tragedy of the commons
   3. The invisible hand
   4. A deflationary spiral
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   B) The tragedy of the commons

5. If a price rises sharply and demand barely moves, what is said about that demand?

   1. It is in surplus
   2. It is inelastic
   3. It is monopolised
   4. It is subsidised
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   B) It is inelastic

6. What does 'moral hazard' describe in economics?

   1. Working off the official books
   2. Advertising misleadingly
   3. Taking more risk when someone else bears the cost
   4. Fixing prices with rivals
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   C) Taking more risk when someone else bears the cost

7. A cost of production that falls on society but never enters the price is called what?

   1. Depreciation
   2. Value added
   3. An inflation gap
   4. An externality
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   D) An externality

8. Printing money without producing more goods does not make a country genuinely richer.

   1. True
   2. False
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   A) True

9. If supply is fixed and demand rises, the price would normally be expected to rise.

   1. True
   2. False
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   A) True

10. In trade, one side gaining necessarily means the other side is losing.

    1. True
    2. False
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    B) False