Economics: Unit 1 (23/24)

In almost every society, the problem of scarcity must be dealt with because-

• goods are distributed evenly.

• resources are limited.

• farmers tend to overestimate their crop yields.

• governments tend to overspend on the military.

Points A, B, and C all represent what on the production-possibilities curve?

• Point F can not be reached because no extra resources are available.

• An option inside the curve represents less than maximum production.

• There are limited production possibilities because only two good are represented.

• The maximum combination of goods and services that can be produced.

What role does government play in the circular flow model?

• Collects taxes from people only.

• No money is exchanged between the government and businesses.

• The government doesn't participate in the model.

• The government can be both a consumer and a producer.

If the government stopped producing helicopters for the U.S. military, what would happen to the local economy where they were being built?

• There would be in increase in income to local households.

• There would be a decrease in income to local households.

• People there would have more purchasing power.

• There would be a decrease in unemployment.

The role of resource owners and firms in a circular flow model of the economy are--

• independent of one another.

• only for domestic and never international markets.

• interdependent of one another/work together.

• never impacted by actions of the government.

*Purchases goods and services in the products market.

*Purchases factors of production in the factors market.

*Transfers money to households and businesses.

*Collects taxes from both businesses and individuals.

What of the following if being described above?

• Actions of firms that affect the circular flow model.

• Actions of households that affect the circular flow model.

• Actions of businesses that affect the circular flow model.

• Actions of government that affect circular flow model.

If businesses can increase the amount of productivity to increase inventories, the result will most likely be-

• decreased productivity.

• economic growth.

• increased inflation.

• increased taxes.

Most people seem to want more than they already have which impacts the goods and services provided to society.

The economic problem above is most likely created by ___________.

• Scarcity

• Choice

A decision people make when a resource has two or more uses.

The economic problem above is most likely created by ___________.

• Scarcity

• Choice

The ability to decide which good, service, or resource to purchase or provide from a list of options.

The economic problem above is most likely created by ___________.

• Choice

• Scarcity