Every day, we make choices. What should we buy? How should we
spend our money? Should we save or borrow? Should a business hire more workers
or reduce costs? Should a government spend more on education, healthcare or
national defence?
Behind these everyday decisions is one powerful idea: scarcity.
Economics is not simply about money, banking or business. It
is the study of how people, businesses and societies make decisions when their
wants are greater than the resources available to satisfy them. Since resources
such as time, labour, land, raw materials and money are limited, every choice
involves deciding how those resources should be used.
Economics also helps us understand why people specialise, why
businesses trade, how markets work, why governments regulate economic activity
and how national economies grow or experience problems such as unemployment and
inflation.
In this Knowledge Test, let's see how well you understand the
fundamental ideas that introduce us to the world of economics.
📚 Knowledge Test: Introduction to Economics
Test your understanding of scarcity, specialisation, markets, economic systems and more.
How many questions did you get right? Share your score and
challenge someone else to take the test!
Economics is ultimately a way of thinking about choices.
Scarcity forces individuals, businesses and governments to
make decisions.
Specialisation and trade allow people to produce more
efficiently, while markets coordinate the exchange of goods and services.
Microeconomics helps us understand individual households and firms, while macroeconomics
examines the economy as a whole.
The more we understand these ideas, the better we can
evaluate economic decisions in our personal lives, businesses and society.
