Economics Test 1 – 60 Foundational Exam Questions on Scarcity, Wants, Goods, Services & Factors of Production – 2025/2026

This document includes 60 clear and concept-based questions and answers for Economics Test 1, created for the 2025/2026 academic year. It offers an essential introduction to the fundamental principles of economics, focusing on core ideas such as scarcity, wants, opportunity cost, goods and services, and the four factors of production. This resource is ideal for first-year economics students or anyone seeking a foundational understanding of economic systems and human behavior. The exam begins by examining the problem of unsatisfied wants, introducing the concept that human dissatisfaction—whether mental, physical, or emotional—drives economic activity. The test outlines scarcity as the fundamental economic issue, highlighting how wants exceed available resources and leading into a discussion of opportunity cost as a consequence of decision-making. Students are tested on the nature of resources, distinguishing between tangible and intangible types, and learn to identify economic goods, consumer goods, capital goods, and durable vs. non-durable goods. A full section is devoted to services, value, utility, and the paradox of value—explaining why essential goods like water may be cheap while non-essential ones like diamonds are expensive. The final section introduces the three basic economic questions (what to produce, how to produce, and for whom to produce) and the four factors of production (land, labor, capital, and leadership/entrepreneurship). The test concludes with the scope of economics, defining it through description, analysis, explanation, and prediction. This comprehensive resource is suitable for students in introductory economics, business, or social sciences courses. Relevant for: – Students in Economics, Business, Political Science, or Social Studies – Courses such as Principles of Economics, Intro to Microeconomics, or Survey of Economics Keywords: unsatisfied wants, scarcity, opportunity cost, economic problem, tangible resource, intangible resource, goods, consumer goods, capital goods, durable goods, non-durable goods, services, utility, value, paradox of value, basic economic questions, what to produce, how to produce, for whom to produce, land, labor, capital, entrepreneurship, factors of production, description, analysis, explanation, prediction