EC - 903 Pretest

Front

The inputs that allow businesses to operate are called economic

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resources.

Answer explanation

Resources. Economic resources are the human and natural resources and capital goods used to produce goods and services. Economic incentives are the monetary motivations for engaging in economic activity. An economic model serves to illustrate a point about economic happenings.

Front

Natural and human resources are two categories of economic resources. The third category is

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capital goods.

Answer explanation

Capital goods. Capital goods are manufactured or constructed items that are used to produce goods and services. These resources include equipment, machinery, buildings, supplies, etc. Water and salespeople are examples of natural and human resources, respectively. Money is classified as financial capital rather than as a capital good.

Front

Industrial equipment is an example of a

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capital good.

Answer explanation

Capital good. Capital goods are manufactured or constructed items that are used to produce goods and services. Human resources represent mental and physical effort and include all people in the workforce. Natural resources are such things as air and land that are provided by nature. Consignment goods are items sellers do not have to pay for until they are sold.

Front

Cotton is an example of a __________ resource.

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natural

Answer explanation

Natural. Natural resources include things that are provided to us by nature, such as land, coal, and petroleum. Capital is the assets of a business. Labor resources include all the people in the workforce.

Front

The type of economic resource that includes all of the personal effort required to produce and distribute goods and services is

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human resources.

Answer explanation

Human resources. Without the mental and physical labor of human resources, the other economic resources could not be utilized to produce and sell the goods and services wanted and needed by consumers. Natural resources are items that are found in nature and used to produce goods and services. Capital goods are manufactured or constructed items that are used to produce goods and services. Equipment is one type of capital good.

Front

Another term for economic resources is

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factors of production.

Answer explanation

Factors of production. Economic resources include natural resources, human resources, and capital goods. These resources are also known as productive resources, or factors of production, because they enable businesses to produce the goods and services that consumers want. Financial capital is money needed to operate a business. Nonmonetary benefit is a benefit that the employee does not receive in the form of money but still enjoys. Consumer goods and services are products produced for personal consumption.

Front

Demographic change, lack of training, and lack of interest are reasons that __________ become limited.

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human resources

Answer explanation

Human resources. Human resources become limited when there is a lack of training for a position, when the supply of eligible people changes, and when there is a lack of interest in a certain job. Capital goods and natural resources become limited in different ways. Economic resources include human resources, natural resources, and capital goods.

Front

What can producers do to overcome a problem with limited human resources? Options: Increase use of natural resources, Decrease automation, Reduce benefits, Offer training and retraining

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Offer training and retraining

Answer explanation

Offer training and retraining. Human resources are the people who work to produce goods and services. Training and retraining help workers develop new skills and do a better job. When human resources are limited, producers are more likely to increase the use of automation and increase benefits. An increase in the use of natural resources, items that are found in nature and used to produce goods and services, would not influence the supply of human resources.

Front

A transportation service makes sure that its trucks are well maintained and driven with care. This is an example of a way to

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conserve the firm’s capital goods.

Answer explanation

Conserve the firm’s capital goods. Capital goods are manufactured or constructed items that are used to produce goods and services. Trucks that are taken care of will last longer. Adding more trucks would be an example of increasing the number of capital goods. Natural resources are items that are found in nature and used to produce goods and services. Human resources, or workers, are retrained to develop new skills.

Front

Finding alternative sources of power for consumer use, such as replacing gas and oil with solar energy, is an example of responding to limited __________ resources.

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natural

Answer explanation

Natural. When natural resources are limited, resource owners and producers can use the technique of finding alternative resources that will serve the same purpose as the limited resource. Natural power such as gas and oil would not be considered human resources. Capital resources include inventories, buildings, machinery, and the use of various technologies.