Economics · Unit 1
What is Economics?
Scarcity, choices, and the cost of choosing
Economics is not the study of money. It is the study of choice under scarcity, and money is one accounting device that happens to make those choices comparable.
The unit covers scarcity, why choices are unavoidable, opportunity cost, what economists actually do, and what the subject covers.
This unit breaks down into 23 short steps and 120 questions, starting at difficulty 1 and building to 5. Below you can see exactly what it covers, how the path is structured, and worked examples with explanations.
- Steps
- 23
- Questions
- 120
- Difficulty
- 1-5
What this unit covers
- What Economics Means
- What Economists Do
- Making Choices
- Opportunity Cost
- Scarcity
Where this fits
The first unit in the track. Opportunity cost recurs everywhere afterwards.
Where people slip
Opportunity cost is the value of the best alternative given up, not the money spent. A free afternoon spent one way costs every other way you could have spent it.
How the unit is structured
What is Economics? runs as 23 short steps that unlock in order. 17 are practice rounds and 6 are challenge rounds that pull together everything before them. Questions start at difficulty 1 and climb to 5 as you progress.
Challenge rounds
Example questions
30 real questions from this unit, with the answer and the reason behind it, grouped by what they practise. There are 120 in the unit altogether.
Making Choices
- Fill the blankLevel 1
1. When we pick one thing over another, we are making a ____.
- choicecorrect
- mistake
- promise
- drawing
Picking between options is exactly what making a choice means.
- Multiple choiceLevel 1
2. When you choose one thing, what do you usually have to do with another?
- Give it upcorrect
- Get it for free
- Keep both easily
- Double it
Because resources are limited, choosing one thing usually means giving up something else.
- Odd one outLevel 2
3. Three of these are choices a person makes with limited money. Which one is NOT a choice?
- The sun rising in the morningcorrect
- Buying a snack instead of a toy
- Saving money instead of spending it
- Spending an hour reading or playing
The sun rising happens on its own; the others are decisions people make about how to use resources.
- Put in orderLevel 2
4. Put the steps of making a smart choice in order, from first to last.
Answer: Notice what you want -> See that your money or time is limited -> Compare your options -> Pick the best one
First you notice what you want, then see your limits, compare options, and finally pick one.
- True or falseLevel 2
5. Because resources are limited, almost every choice means giving something up.
Answer: True
With limited money and time, picking one option usually means we cannot have another.
- Choose all that applyLevel 3
6. Which of these are real trade-offs? Select all that apply.
- Saving money now means less to spend todaycorrect
- Extra sports practice means less time for homeworkcorrect
- Buying a bigger phone means less money left overcorrect
- Breathing air uses up your savings
Each one means gaining something by giving up another use of limited money or time.
Opportunity Cost
- Fill the blankLevel 2
7. The value of the next best thing you give up when you choose is called the ____ cost.
- opportunitycorrect
- birthday
- sticker
- weekend
Opportunity cost is the value of the best alternative you did not choose.
- Match the pairsLevel 2
8. Match each choice to its opportunity cost (the thing given up).
Answer: Spend your hour playing = The homework you did not do; Buy a toy with your $5 = The book you did not buy; Sleep in late = The morning walk you skipped
The opportunity cost is always the best other thing you could have done instead.
- Multiple choiceLevel 2
9. What does opportunity cost mean?
- The value of the next best thing you gave upcorrect
- The money left in your pocket
- The price on the shop label
- The number of choices you have
Opportunity cost is the value of the next best choice you gave up.
- True or falseLevel 2
10. Opportunity cost is the thing you give up when you make a choice.
Answer: True
Yes, it is the next best option you did not pick.
- Type the answerLevel 2
11. What two-word term names the value of the next best choice you give up? Answer: opportunity ____.
Answer: cost
The full term is opportunity cost.
- Choose all that applyLevel 3
12. Which statements about opportunity cost are true? Select all that apply.
- Every choice has an opportunity costcorrect
- It is the next best option you gave upcorrect
- It can be time, not just money
- It only exists when you spend cash
Every choice has an opportunity cost, and it is the best option you gave up, not just money.
Scarcity
- Fill the blankLevel 1
13. Because we cannot have everything we want, we face ____.
- scarcitycorrect
- sunshine
- silence
- friendship
Scarcity is the basic problem that there is not enough for everything we want.
- Choose all that applyLevel 2
14. Which of these can be scarce, meaning there is a limited amount? Select all that apply.
- Moneycorrect
- Time in a daycorrect
- Clean drinking watercorrect
- The number 7
Money, time, and clean water are all limited, so they can be scarce.
- Guess the numberLevel 2
15. Time is scarce partly because a day only has this many hours. How many hours are in one day?
Answer: 24 hours
A day has 24 hours, so we must choose how to use that limited time.
- Match the pairsLevel 2
16. Match each economics word to what it means.
Answer: Scarcity = Not enough to meet every want; Resources = Things we use to make and do things; Wants = Things we would like to have
These are the building-block words of economics: scarcity, resources, and wants.
- Multiple choiceLevel 2
17. Scarcity happens because our wants are almost endless but our resources are what?
- Limitedcorrect
- Endless
- Invisible
- Free forever
We want a lot, but resources like money, time, and materials are limited, so we face scarcity.
- Odd one outLevel 2
18. Which of these is usually NOT scarce?
- Sunlight outdoorscorrect
- Money
- Gold
- Clean water
Outdoor sunlight is usually free and plentiful, while money, gold, and clean water are limited.
What Economics Means
- Fill the blankLevel 1
19. Economics studies how people make ____ when they cannot have everything they want.
- choicescorrect
- friends
- paintings
- noises
When we cannot have it all, we have to pick, and picking is making a choice.
- Multiple choiceLevel 1
20. What does economics mainly study?
- How people use limited resources to meet their needs and wantscorrect
- How plants grow from tiny seeds
- How to paint pictures of nature
- How stars move across the night sky
Economics is about how people use their limited resources to meet their many needs and wants.
- True or falseLevel 1
21. Economics is only about money.
Answer: False
Money is part of it, but economics is really about choices, resources, needs, and wants too.
- Choose all that applyLevel 2
22. Which of these are things economics helps us understand? Select all that apply.
- How people choose what to buycorrect
- How businesses use their resourcescorrect
- Why people save and spend moneycorrect
- What tomorrow's weather will be
Economics covers how we use resources, make choices, and buy and sell, but the weather is a science topic.
- Odd one outLevel 2
23. Which of these is NOT something economics studies?
- The color of the skycorrect
- How people spend money
- How goods are produced
- How people save for the future
Economics looks at producing, buying, and saving; the color of the sky is a science question, not an economics one.
- Sort into groupsLevel 4
24. Sort each topic into microeconomics or macroeconomics.
Answer: How one coffee shop prices its drinks = Microeconomics; A single family's budget = Microeconomics; A country's total unemployment = Macroeconomics; A nation's overall inflation rate = Macroeconomics
Micro studies single firms and families; macro studies whole-country totals like national unemployment and inflation.
What Economists Do
- Fill the blankLevel 1
25. A person who studies the economy and how people make choices is called an ____.
- economistcorrect
- artist
- dentist
- pilot
An economist is someone who studies the economy.
- Multiple choiceLevel 2
26. Which of these is a question an economist might try to answer?
- Why do prices of some things go up over time?correct
- Why is the ocean salty?
- How do birds learn to fly?
- Why do leaves change color?
Why prices rise is an economics question about how markets and money work.
- Odd one outLevel 2
27. Which of these is NOT a job an economist would do?
- Fixing a leaky water pipecorrect
- Studying why prices change
- Looking at how people spend money
- Studying how a country uses its resources
Fixing a leaky pipe is a plumber's job; the others are economics work about resources and money.
- Sort into groupsLevel 2
28. Sort each question into whether an economist would study it or not.
Answer: How do people spend their money? = Economics; Why do prices rise? = Economics; How do plants make food? = Not economics; What makes a rainbow? = Not economics
Economists study money, prices, and choices; questions about plants or rainbows belong to other sciences.
- True or falseLevel 2
29. Economists study how people, businesses, and whole countries use their resources.
Answer: True
That is exactly what economists do, from one person's budget to a whole nation's economy.
- Choose all that applyLevel 3
30. Which of these tasks might an economist do? Select all that apply.
- Study data on prices and jobscorrect
- Advise a government on its budgetcorrect
- Predict whether the economy will growcorrect
- Perform surgery in a hospital
Economists study data, advise on policy, and predict trends, all about how resources are used.
Where these questions come from. Each unit starts as a plan of the concepts it should cover and the difficulty it should span. Questions are written against that plan with AI assistance, then checked by a validator that rejects anything without a single defensible answer, an explanation, or plausible wrong options. How we write questions sets out the whole process, and corrections are fixed in the bank and reach the site and the app the same day.
How you practise
This unit mixes 10 different question formats, so you are recalling and applying rather than recognising the same layout every time.
- Choose all that apply
- Fill the blank
- Guess the number
- Match the pairs
- Multiple choice
- Odd one out
- Put in order
- Sort into groups
- True or false
- Type the answer
Practise What is Economics?
120 questions across 23 steps. Start with step one and crawl at your own pace.
Play this unitRead about What is Economics?
Explainers from our blog on what this unit covers. Each one ends with real questions from the bank.
- What Is Scarcity in Economics? Why Choices Have TradeoffsLearn why limited resources force choices, create opportunity costs, and shape decisions by people, firms, and governments.August 14, 2026 · 6 min read
- Opportunity Cost Explained with Everyday ExamplesOpportunity cost is the value of the best alternative you give up when you choose. Learn how economists use it to think about time, money, and trade-offs.August 13, 2026 · 5 min read
- What Is Marginal Cost? A Simple Economics ExplanationLearn how economists measure the extra cost of producing one more unit and why it matters for output, pricing, and decisions.August 17, 2026 · 6 min read
- What Is a Recession? How Economic Downturns Are IdentifiedLearn how economists recognise a broad decline in activity, what usually changes during a downturn, and why one measure is not enough.August 14, 2026 · 6 min read
More units in Economics
- Needs, Wants and ResourcesWhat we need, what we want, and limited resources
- Money and TradeFrom barter to money and prices
- Goods and ServicesProducers, consumers, and where things come from
- Earning, Spending and SavingPersonal money basics and budgeting
- Supply and DemandHow buyers and sellers set the price
- Markets, Prices and CompetitionHow markets and competition work
- Businesses and ProductionFirms, costs, profit, and entrepreneurship
- Money, Banking and CreditBanks, interest, credit, and central banks