The following questions relate to basic economic principles. Select the best answer for each.

1. B. Limited availability of resources relative to unlimited wants Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources. 2. D. Consumption The three basic categories of economic resources (factors of production) are Land, Labor, and Capital. Consumption is the act of using goods and services, not a resource itself. 3. B. The value of the next best alternative forgone Opportunity cost is what you give up when you choose one option over another. It is the value of the best alternative that was not taken. 4. C. Economists include opportunity costs; accountants record out-of-pocket expenses Accountants focus on explicit costs (actual monetary outlays). Economists consider both explicit costs and implicit costs, which include opportunity costs (the value of forgone alternatives). 5. B. The additional benefit from consuming one more unit Marginal benefit is the change in total benefit that results from an action, such as consuming one additional unit of a good or service. 6. C. GDP Gross Domestic Product (GDP) measures the total monetary value of all the finished goods and services produced within a country's borders in a specific time period, typically a year.