ECON Units 1-2 REVIEW

Why would scarcity and choice most likely be basic economic problems for all people?

• Because resources are sustainable, and people must choose which resources to produce

• Because resources are limitless, and people have unlimited choices that can cause confusion

• Because resources are not always available, and people must choose whether to produce more resources

• Because resources are always limited, and people must make choices by prioritizing their needs over their wants

How would scarcity and shortages most accurately be compared?

• Scarcity is controllable, while shortages cause serious economic problems

• Shortages are avoidable because resources are limitless, while scarcity is unavoidable

• Shortages are common to all societies, while scarcity only occurs in developing countries

• Scarcity always exists and is a problem faced by all societies, while shortages are manageable

Which country on the map faces scarcity in gasoline? What conclusions can be drawn from the map?

• A. Scarcity is only measured in natural resources.

• B. Scarcity only occurs in countries with large populations.

• C. Scarcity is a third world problem.

• D. Scarcity is not determined by the wealth of a given nation.

The high-fashion clothing in the photograph best represents the idea of

• needs

• wants

• shortages

• resources

As a factor of production, the instruction provided by a teacher is considered—

• labor

• resources

• capital

• physical capital

Purchasing a new piece of equipment for one's factory is affecting which factor of production?

• Human capital

• Entrepreneurship

• Physical capital

• Land resources

Machinery Improves Productivity

• Labor

• Human capital

• Entrepreneurship

• Knowledge

Jane wants to start a business selling chocolate avocado pudding. Based on the factors of production – land, labor, and capital, what can you infer about Jane's most urgent needs?

• Jane needs to buy land in order to grow chocolate, advertise her product, and take out bank loans to produce the products

• Jane needs to acquire chocolate and avocados, find workers to produce her product, and secure financial resources to create the pudding

• Jane needs to acquire chocolate and avocados, advertise her products in local markets, and find venture capitalists to help grow her business

• Jane needs to buy land in order to grow avocados, hire individuals to harvest the avocados, and secure space in a local farmer's market to sell her product

Julie struggles to decide whether to attend Harvard University or Rutgers University. She finds the prestige and networking possibilities associated with Harvard exciting, but Rutgers has offered her an exceptional financial package. She is using a grid to determine which school to attend. What economic concept is Julie illustrating in her decision making?

• Julie must determine the efficiency of choosing Harvard or Rutgers and decide which is most desirable for her

• Julie must determine the marginal cost of choosing Harvard or Rutgers and decide which is most desirable for her

• Julie must determine the opportunity cost of choosing Harvard or Rutgers and decide which is most desirable for her

• Julie must determine the profitable alternative of choosing Harvard or Rutgers and decide which is most desirable for her

Karen's Decision-Making Grid

• Opportunity cost

• Alternative factor

• Additional benefit

• Factor of production