Understanding Economics

Consider the following scene: A household works together to do chores like cutting wood and cooking meals. What economic concept does this illustrate?

• Scarcity

• Needs

• Wants

• Resource allocation

Which of the following is an example of a good?

• Haircut

• MP3 player

• Internet service

• Education

Fill in the blank: A ______ is a physical thing you can hold, while a service is something that gets used up right after it is purchased.

• Need

• Want

• Good

• Resource

Fill in the blank: Economics is the study of how we satisfy our wants and needs with the ______ resources we have.

• Abundant

• Limited

• Infinite

• Surplus

What is the main question that comes to mind regarding funding in economics?

• Why don't we fund them all?

• How to increase taxes?

• How to reduce spending?

• How to improve efficiency?

Fill in the blank: The government must decide how much money to spend on health care or what ______ should be placed on the internet.

• Taxes

• Controls

• Investments

• Regulations

Capital is anything that is used to produce other goods and services. True or False?

• True

• False

Why do we study economics?

• To become good consumers

• To become good citizens

• To increase our resources

• Both A and B.

What are the factors of production mentioned in the text?

• A) Land, labor, capital

• B) Labor, machines, buildings

• C) Resources, income, goods

• D) Services, goods, capital.

Businesses need to take resources, land, labor, or capital from something else they make to fund the development of a new product. True or False?

• True

• False