Chapter 2 review

What is scarcity?

• unlimited wants and needs

• a shortage of resources

• a lack of goods and services

• limited expenses

Which is NOT a factor of production?

• natural resources

• labor

• capital

• the marketplace

Which statement about natural resources is true?

• Water is renewable because it can be reproduced.

• Lumber is not renewable because it takes a long time to grow new trees.

• Coal is renewable because there is so much of it still in the ground.

• Agricultural products are renewable because new crops can be grown each season.

Which statement about natural resources is NOT true?

• Natural resources can be processed to make goods.

• The amount of natural resources available to a society has little effect on its economy.

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• Synthetic materials such as nylon can be made from natural resources.

• Countries that have scarce natural resources must get them from somewhere else

Which means the same as human resources?

• capital resources

• service providers

• labor resources

• unskilled workers

Which is an example of a capital resource?

• A. a machine used to make molded plastic toys

• B. a customer service representative

• C. money borrowed from a bank

• D. the president of a company

Which refers to how people satisfy their needs and wants by making choices?

• A. entrepreneurship

• B. economics

• C. equilibrium

• D. opportunity

What are two basic types of economic systems?

• A. supply and demand

• B. competition and profit

• C. private enterprise and free enterprise

• D. market economy and command economy

Which is a characteristic of capitalism (market economy)?

• A. Resources are privately owned.

• B. Resources are shared equally.

• C. There is an even distribution of income.

• D. Prices are determined by government planners.

Which is true about people working in a market economy who have labor skills that are in demand?

• A. Their earnings are the same as other workers their age.

• B. Their incomes tend to be lower than others whose skills are not in demand.

• C. Their incomes tend to be higher than others whose skills are not in demand.

• D. Their earnings are not related to demand.