POBF Econ Concepts 5.01D

Into what two categories can wants be divided?

• Unlimited and limited

• Unlimited and economics

• Economic and noneconomic

• Unlimited and noneconomic

Seeing a movie at a theatre would be considered a(n) __________ want

• economic

• unlimited

• limited

• noneconomic

Friendship would be considered a(n) __________ want.

• economic

• limited

• unlimited

• noneconomic

Water and air are examples of __________ resources, while people are considered to be __________ resources.

• natural, human

• physical, mental

• capital, human

• mental, natural

In economics, capital goods include

• labor and management

• mental and physical work

• buildings and equipment

• trees and water

Why are resources considered limited?

• Everyone has them, and they change

• There are not enough available for everyone to have as much of them as desired

• There are so many that people must decide which ones to choose at any one time.

• Entrepreneurs do not invest enough of them

A gap between unlimited wants and limited resources creates

• economics

• resources

• wants

• scarcity

John only had $40 to spend and couldn’t decide whether to buy a new pair of jeans or to go to an amusement park. He finally decided to spend his money on the amusement park. What was the opportunity cost of his decision?

• new pair of jeans

• $40

• Trip to amusement park

• no opportunity cost was involved

What are the three basic economic questions?

• When will products be produced, how will products be produced, and how will products be allocated

• When will products be produced, what products will be produced, and how will products be allocated

• What products will be produced, how will products be produced, and how will products be allocated

• Where will products be produced, when will products be produced, and what products will be produced

The ultimate goal of all economic activity is

• consumption

• production

• exchange

• distribution