Economics Fundamentals

Economies experience scarcity because

• governments increase taxes to quickly

• physical capital is overused as a factor of production

• entrepreneurs fail to organize resources efficiently

• people have unlimited wants but limited resources

Which situation creates scarcity in an economy

• Citizens have more wants than they can fulfill with their available resources

• Businesses disregard public needs and only supply goods that are cheap to make.

• Governments decide to distribute goods to make sure all citizens are equal.

• Human and physical capital are used as factors of production when making goods.

Scarcity is a feature of economics because:

• the factors of production can be used in many different ways.

• entrepreneurs can lose money if their businesses don't succeed.

• people have limited resources to fulfill their unlimited wants.

• governments cannot guarantee economic equality for all citizens.

Which term works best as a title for the list?

~ factor of production

~refers to natural resources

~ includes trees, oil and salt

• Labor

• Capital

• Entrepreneur

• Land

Which term works best as a title for the list?

~ Factors of production

~ People working

~ Doctors, Drivers, Cashiers

• Land

• Capital

• Labor

• Entrepeneur

Which term works best as a title for the list?

~ Factor of production

~ Equipment used in production

~ Printers, Machinery, Tools

• Capital

• Labor

• Land

• Entrepreneur

Societies make decisions about what goods should be produced by:

• guaranteeing that all entrepreneurs make a profit.

• giving citizens unlimited resources to fulfill their wants.

• reducing the total factors of production needed to make goods.

• organizing limited resources to meet citizens' wants and needs.

What is one way societies make decisions about how goods should be produced?

• By allowing entrepreneurs to create new ideas to meet people's needs

• By forcing businesses to provide services to citizens for free at all times

• By avoiding scarcity and giving people unlimited resources to fulfill their wants

• By reducing the number of factors of production needed to make goods

Societies decide who should get the goods they produce by:

• making sure all citizens have their most important needs met.

• considering which citizens should get their wants fulfilled.

• making sure entrepreneurs always have their needs fulfilled.

• preventing any group of citizens from fulfilling all of its wants.

How do incentives affect people's economic decisions?

• They get rid of the trade-offs associated with economic choices.

• They make it more difficult for people to make economic choices.

• They eliminate the need for a cost-benefit analysis of economic choices.

• They offer benefits for making certain economic choices.