Economic Foundations

Goods are ________ that people consume or use, such as food.

• Products

• Services

Which of the following is NOT an example of a service:

• Your neighbor mowing your lawn

• A hair dresser cutting your hair

• A nurse taking care of you while you are sick

• An article of clothing you purchase

True or False: An economy is a system of producing, selling, and buying goods and services.

• True

• False

Which statement best characterizes opportunity cost?

• The amount of a good that businesses are able to produce

• The value of a product that you give up in a trade-off with another product

• The number of people who are ready to buy a product at a certain price

• The amount of money left over after expenses have been paid

When there are not enough resources to meet the needs and wants of people, we call this:

• Demand

• Supply

• Scarcity

• Surplus

When a product or resources becomes scarce, the price of it will_________

• increase

• decrease

• stay the same

The amount of a good or service that businesses are willing and able to produce is known as:

• Demand

• Surplus

• Scarcity

• Supply

The desire to have a good or service and the number of people who are ready to buy it at a certain price is known as:

• Supply

• Demand

• Surplus

• Scarcity

How do you calculate profit?

• Expenses  $-$  Revenue  $=$  Profit

• Revenue  $-$  Expenses $=$  Profit

What are the four factors of production?

• Natural, Resources, Capital, Labor, and Stores

• Entrepreneurs, Labor, Capital, and Demand

• Natural Resources, Capital, Labor, and Entrepreneurs

• Labor, Capital, Natural Resources, and Supply