PFL

Scarcity is defined as “a limited supply of resources and..."

• Limited wants for those resources

• Limited resources

• Unlimited resources

• Unlimited wants for available resources

Why do we have to make production choices about available resources?

• Too many resources for the demanded

• Unlimited resources

• Limited wants

• Scarcity

Economics is the study of how

• Governments allocate resources to satisfy citizens’ unlimited wants

• People use their scarce resources to satisfy their unlimited wants

• Governments supply money to businesses to produce goods and services

• Businesses supply unlimited goods and services with limited resources

Opportunity cost is the value of the _______ that had to be given up if the alternative was

chosen

• All the items

• The next best alternative

• The least important alternative

• Everything except the item chosen

Nemo is studying for his math test but his favorite show just started. If he continues to

study for his math test he will miss out on watching is show. Nemo decides that studying

for the math test is more important than watching his favorite tv show. In this scenario,

what is the opportunity cost?

• Studying for the quiz

• Eating dinner

• Watching TV

• Taking a nap

Because of scarcity, people are forced to make _______ about how to utilize their

resources

• Sacrcity

• Choices

• Needs

• Supply Lists

What is a production possibility curve?

• A graph that shows how efficiently an economy can produce a combination of two

  goods

• A graph showing supply and demand within a country

• A graph showing the needed price ceilings and price floors needed to obtain an

  equilibrium price

• A graph showing the inefficiency of producing multiple goods over a period of time

Janet wishes to increase the productivity of her art design studio. In order to do so, she is

considering buying more technology and also hiring additional employees. As both

investments would require considerable capital, Janet wants to make sure she has

carefully considered the direction her company should take based on changing trends in

technology and the labor force. Which of the following tools might help her make the best

decision for her company?

• A supply graph

• A production possibility curve

• A demand graph

• A circular flow model

If a company decided that only producing 4 automobiles a year was unprofitable

and instead decided to produce 6 automobiles, how many forklifts would the

company lose out on producing at the same time?

• 21

• 12

• 9

• 0

The process of quantifying the costs and benefits of a decision is known as

• Circular flow theory

• Equilibrium analysis

• Cost-Benefit analysis

• Supply-Demand analysis