Factors of Production and Scarcity

While the wants and needs of consumers are unlimited, productive resources are limited, forcing consumers
and producers to make choices. This concept is known as

• Borrowing

• Surplus

• Scarcity

• Budgeting

In economics, the term “scarcity” is best illustrated by which of the following situations?

• Producers lack the productive resources needed to produce goods and services.

• Consumers lack the money needed to buy goods and services.

• Entrepreneurs lack the customers needed to earn a profit.

• Laborers lack the skills needs to earn a promotion.

Which of the following motivates entrepreneurs to take risk?

• Credit score

• Prices

• Gross domestic product

• Profits

What are the factors of production?

• Land, labor, capital, entrepreneurship

• Land, needs, wants, capitals

• Rent, wages, interest, profit

• Land, labor, scarcity, entrepreneurship

In the production of loaves of bread, which best represents the factor of capital?

• The flour used in the dough

• The retailer who sells the bread

• The oven used to bake the bread

• The worker who kneaded the dough

George decides to go back to school to earn an advanced degree. Which productive resource is most directly affected by George’s decision?

• Entrepreneurship

• Human capital

• Natural resources

• Physical capital

People’s education, skills/abilities, health, and motivation are all part of _________ capital.

• Physical

• Natural

• Financial

• Human

Which topic would a macroeconomist most likely study?

• Supply and demand

• Production costs

• Inflation

• Labor markets

Microeconomics focuses on

• the economic impact of implementing fiscal and monetary policy.

• the on the big picture, looking at the economy as a whole.

• international trade and finance.

• small economic units, such as individuals, firms, and markets.

Which description below best describes the relationship between opportunity costs and trade-offs?

• Trade-offs are the opposite of opportunity cost.

• Trade-offs decrease the opportunity cost of any decision.

• Opportunity costs occur when trade-offs are made.

• The opportunity costs of and trade-off is constant.