Introduction to Economics Review

The three broad factors of production are land, labor, and capital.

• True

• False

The problem of scarce resources, but unlimited wants, exists for every person and society on the planet.

• True

• False

All economies decide, in a similar way, what goods and services will be produced.

• True

• False

Under a pure centrally planned economy, central organizers decide how to produce goods and who should get them.

• True

• False

Any movement along a production possibilities frontier involves giving up some of one good to get more of the other.

• True

• False

Making choices in a world of scarcity means that you must…

• spend your money carefully to get everything you want.

• work very hard to earn the money you need.

• pass up some alternatives.

• save some of your income for the future.

Which of the following is a natural resource?

• Copper ore that is still in the ground

• Copper that has been refined and made into electric wire

• Copper wire that is installed in a new house

• Electricity that flows over copper wire.

Which describes human capital?

• Buildings and tools

• Skills and knowledge

• Land and labor

• Slowing or stopping production

Points along a production possibilities frontier represent the production of two types of products that…

• are most satisfying to consumers.

• make efficient use of resources.

• are most profitable for business owners.

• are best for the economy.

A production possibilities frontier has a bowed-out shape because resources in the economy…

• are not all perfectly adaptable to the production of both types of goods.

• cost more to buy as production grows.

• are used less efficiently as production grows.

• can be used for different types of production without a loss of efficiency.