Unit 1: Lesson 2 - Economic Decision Making-Master Notes

What is the main focus of economics as defined in the material?

• The study of ancient civilizations

• The science of choices and how we use scarce resources

• The study of weather patterns

• The science of animal behavior

Which of the following is NOT an example of a limited resource mentioned in the material?

• Time

• Money

• Water

• Land

Why are goods and services considered scarce?

• Because people do not want them

• Because the resources needed to produce them are scarce

• Because they are always free

• Because they are easy to produce

What is the difference between a shortage and scarcity according to the material?

• Shortages are permanent, scarcity is temporary

• Shortages are usually temporary, scarcity is forever

• Both are temporary

• Both are permanent

Which of the following is NOT listed as a type of scarce resource (factor of production)?

• Land

• Labor

• Capital

• Technology

What is an example of 'land' as a factor of production?

• The machinery used in refining oil

• Property for sale inside city limits

• Number of chemical engineers in the US

• Cash money

What does 'labor' refer to in the context of scarce resources?

• Only physical work

• Only mental work

• Human-provided labor, physical, mental, or both

• Only machine work

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

• Natural resources like oil

• Human-provided labor

• Man-made resources that assist workers in production

• Time and money

According to the material, how important is human capital?

• Not very important

• Almost impossible to overstate

• Only important in some industries

• Not mentioned

What is the correct equation for the factors of production as described by economists?

• land + labor + capital = goods and services

• land + capital = goods and services

• labor + capital = goods and services

• land + labor = goods and services