Econ 1.1-1.3

Limited quantities of resources to meet unlimited wants is a

• shortage

• scarcity

• want

• need

Any human-made resource that is used to create other goods and/or services is

• a service

• an entrepreneur

• capital

• labor

Natural resources that are used to make goods and services are considered

• equipment

• money

• labor

• land

Which of the following is NOT a factor of production?

• the land required for a hog farm

• the training required to repair an airplane engine

• the teacher required to teach an economics class

• the amount of money required to buy a car

Why are individuals, companies, and governments required to constantly make choices about how to best utilize resources?

• There is always a shortage of resources

• There is always a scarcity of resources

• They all have more needs than wants

• They all have more wants than needs

Why are scarcity and choice basic to the study of economics?

• because there is not an endless supply of all resources

• because there is an endless supply of all resources

• because most people have limited wants and needs

• because they are important factors of production

Factors of production are

• all the human-made goods that are used to produce other goods and services; tools and buildings.

• land, labor, and capital; the three groups of resources that are used to make all goods and services.

• the skills and knowledge gained by a worker through education and experience.

• natural resources that are used to make goods and services.

Which of the following is a guns or butter decision?

• A nation shifts money from building railroads to building highways.

• A company decides to build armored tanks instead of bombs.

• A company chooses to make more cheese and less butter.

• A nation decides to produce fewer fighter jets and more bridges.

What are you doing when you make a decision at the margin?

• taking an all or nothing approach to a problem

• reviewing several options of how to use one additional unit of a resource

• examining two primary options and their trade-offs before making a decision

• refusing to make a choice

How are trade-offs and opportunity costs different?

• The opportunity cost is the most desirable trade-off.

• A trade-off is the most expensive opportunity cost.

• A trade-off can be put on a decision-making grid, but an opportunity cost cannot.

• It's more important to be aware of the trade-off when deciding something.