Intro to Econ Review

Which consideration must a society address when deciding for whom to produce a potentially scarce or limited resource?

• Who can be most creative with the product?

• Who has the largest resource pool?

• Who has the greatest need?

• Who can bring in the greatest profit?

The four kinds of resources needed to provide goods and services include:

• capital, natural, introducership, and labor

• entrepreneurship, labor, land and capital.

• natural, unnatural, capital and labor

• animal, mineral, manufactural, and decimal

The four kinds of resources needed to provide goods or services are called:

• The Four Facets of Production

• The Four Fallacies of Production

• The Four Factors of Production

• The Four Fixtures of Production

Producers can create their maximum combination of goods, as long as they

• Address consumer desires.

• Guarantee a profit.

• Properly allocate resources.

• Keep up with demand.

Check out this production possibilities curve. Point X represents:

• An inefficient allocation of resources.

• A balanced allocation of resources.

• Ideal production efficiency.

• An unattainable level of production.

Check out this production possibilities curve. What does point Y represent?

• An inefficient allocation of resources.

• A balanced allocation of resources.

• Ideal production efficiency.

• A currently unattainable level of production.

Ricardo works part time at a local computer store. One day, his manager approaches him about moving from cashier to floor supervisor. Ricardo is excited because the promotion comes with a raise; however, the extra work hours would take away from time with his friends. In the end, he decides to take the promotion. What is Ricardo’s opportunity cost?

• Losing extra time to spend with his friends.

• Being able to use the extra money for summer football camp.

• Losing the ability to spend any time with his friends.

• Receiving another promotion in six months.

In a mixed economy, producers decide how to produce by

• Checking government regulations first to make sure their production process doesn’t violate the law.

• Figuring out the cheapest way to produce the product.

• Decreeing that the product will be produced this or that way.

• Producing it the way it has always been produced.

In a command economy, producers decide for whom to produce their product by determining

• Who has the greatest need or want coupled with the ability to pay at the price the producer hopes to offer the product.

• Which sector or sectors of the country needs the product according to the government’s plan.

• Which people are not prohibited by law from purchasing or consuming the product.

• Those people for whom producers have always produced that product for in the past.

In a traditional economy, producers decide what to produce based on:

• What they think they can sell.

• What is permitted under government regulations.

• Whatever they want because producers and the government are the same thing.

• Whatever it was that their parents produced.