Scarcity & Opportunity Cost

A worker in a car factory installs windshields. His action is an example of which factor of production?

• Land

• Labor

• Transportation

• Capital

Trees, minerals, and the real estate on which a company builds its main manufacturing center are all

• Capital resources

• Labor

• (Land) Natural resources

• Entrepreneurship

The following headline appears in the business section of the newspaper: “Fortnight III Begins Marketing Campaign toward Teenagers.” Which of the following fundamental economic questions does this article address?

• What should be produced?

• How will it be produced?

• When will production begin?

• For whom will the product be produced?

Ms. Walker opened an office supply store. She hired 4 people, paid for their professional training, and bought a cash register to use in the store. Ms. Walker managed the business herself and marketed it. Which of the following BEST represents physical capital investment?

• Sending her employees to training

• Buying online advertising

• Getting a loan from the bank

• Purchasing a cash register

In the question above, Ms. Walker is:

• Capital

• The Entrepreneur

• Labor

• Land

Which of the following is investment in human capital for Ms. Walker’s business?

• Sending her employees to training

• Buying online advertising

• Getting a loan from the bank

• Purchasing a cash register

Jake is trying to decide whether to take a summer job as a camp counselor or as a farm laborer. The counselor job allows Jake to have a lot of free time. The farm pays more money, but the work is also much more demanding and he would have less time off. Which of the following would be an opportunity cost of taking the job on the farm?

• The higher wage

• The free time that comes with being a counselor

• Exposure to noisy, angry children

• There is no cost because the wage is higher

Which of the following is a good?

• Haircut

• Milk

• Oil change

• Health care

The central problem in economics is the concept of:

• Scarcity

• Productive resources

• Capital investment

• Determining wants and needs

Billy has always wanted to start his own business. After taking some classes in agriculture, he decides he will buy a farm and plant pecan trees. By making this decision, Billy has answered the economic question of:

• What to produce

• How to produce

• For whom to produce

• Standard of living