Chapter 2 Review

People's wants are unlimited. This fact means that which of the following is always present?

• scarcity

• shortages

• marginal utility

• costs of production

What are the factors of production?

• goods and services

• risk and opportunity

• land, labor and capital

• wages salaries and profits

Ocean waves are considered which type of resource?

• capital

• nonrenewable

• perpetual

• renewable

Which of the following is a major reason the standard of living in Japan is much higher than in Nigeria?

• great human capital

• richer natural resources

• more foreign residents

• fewer temporary shortages

What is the best title for the list: innovator, strategist, risk taker?

• Capitalist

• Entrepreneur

• Investor

• Laborer

Which of these items is a measure of productivity?

• years of education

• bushels of corn per acre

• number of workers employed

• dollars invested in new equipment

Why are tradeoffs necessary?

• Resources are limited

• Every product has flaws

• People want different things

• Advertisers promote products

When Amy returns a good library book without finishing it so she won't have to pay a late fee, what is her opportunity cost?

• paying the fee

• paying for something else

• finishing the book

• reading a different book

What does it mean to maximize utility?

• to become as efficient as possible

• to gain the most satisfaction possible

• to strengthen a national infrastructure

• to strengthen the skills of a workforce

Which scenario best illustrates the law of diminishing marginal utility?

• car breaks down more often as it gets older

• a collector of china figurines is eager to get a new one

• someone who doesn't listen to music does not care about getting a new CD

• a new toy is less exciting to a child with many toys than to a child with just a few