Understanding the Building Blocks of Economics

What are the four main factors of production?

• Money, Stocks, Bonds, Real Estate

• Land, Labor, Capital, Entrepreneurship

• Demand, Supply, Price, Quantity

• Government, Corporations, Non-profits, Households

Which factor of production is best described as the natural resources used to produce goods and services?

• Labor

• Capital

• Land

• Entrepreneurship

Human effort, including both physical and mental effort, used in the production process is referred to as:

• Capital

• Entrepreneurship

• Labor

• Land

What is the role of an entrepreneur in the factors of production?

• To provide the natural resources

• To supply the labor needed for production

• To organize the other factors of production and take on risks

• To lend the money necessary for production

Scarcity in economics refers to:

• The shortage of luxury goods

• The limited nature of society's resources

• The abundance of money in circulation

• The lack of skilled labor in the market

Which factor of production includes tools, machinery, and buildings?

• Labor

• Land

• Capital

• Entrepreneurship

The necessity of making choices because of scarcity in resources leads to the concept of:

• Opportunity cost

• Economic growth

• Inflation

• Deflation

When a country must decide between producing military equipment or consumer goods, this is an example of:

• Comparative advantage

• Trade-offs

• Elasticity

• Consumer sovereignty

Which of the following best describes capital as a factor of production?

• Shares of stock in a company

• The money used to start a new business

• The tools and equipment used in the production of goods

• The training provided to new employees

The concept of scarcity underlines the fact that:

• People's wants are unlimited

• Resources are unlimited

• Wants can be easily satisfied with available resources

• All goods are expensive to produce