What Is Economics?Scarcity and the Factors of Production

Economic Survey

Mr. Rubin de Celis

Chapter 1.1,1.2, 1.3 vocabulary review

What Is Economics?Scarcity and the Factors of Production

1. Why are scarcity and choice basic to the study of economics?

·  because there is not an endless supply of all resources

·  because there is an endless supply of all resources

·  because most people have limited wants and needs

·  because they are important factors of production

2. Any human-made resource that is used to create other goods and/or services is

·  a service.

·  an entrepreneur.

·  capital.

·  labor.

3. Natural resources that are used to make goods and services are considered

·  equipment.

·  money.

·  labor.

·  land.

4. Something such as air, food, or shelter that is necessary for survival is a

·  need.

·  want.

·  good.

·  service.

5. Physical objects such as clothes or shoes are defined as

·  goods.

·  needs.

·  wants.

·  services.

6. Which of the following is NOT a factor of production?

·  the land required for a hog farm

·  the training required to repair an airplane engine

·  the teacher required to teach an economics class

·  the amount of money required to buy a car

7. Limited quantities of resources to meet unlimited wants is a

·  shortage.

·  scarcity.

·  good.

·  need.

8. Why are individuals, companies, and governments required to constantly make choices about how to best utilize resources?

·  There is always a shortage of resources.

·  There is always a scarcity of resources.

·  They all have more needs than wants.

·  They all have more wants than needs.

9. Which of the following is an example of a shortage?

·  the price of oil going up because more people are driving cars

·  the price of grain going down when supplies are scarce

·  having a sale on soda because there are two many cases on the shelf

·  not having enough of one brand of soda in the store on Saturday because of a sale on

10. Which of the following is an entrepreneur?

·  a lawyer for an insurance company who wins a medical malpractice suit

·  an advertising copy writer who writes an award-winning commercial

·  a computer repair shop owner who opens a second shop across town

·  a doctor who volunteers her services in the aftermath of a hurricane

What Is Economics?Opportunity Cost

11. What is something you might use to help you make a choice between two seemingly equal alternatives?

·  a decision at the margin

·  thinking at the margin

·  a decision-making grid

·  a guns and butter decision

12. How are trade-offs and opportunity costs different?

·  The opportunity cost is the most desirable trade-off.

·  A trade-off is the most expensive opportunity cost.

·  A trade-off can be put on a decision-making grid, but an opportunity cost cannot.

·  It's more important to be aware of the trade-off when deciding something.

13. Deciding whether to do or use one additional unit of some resource is

·  a factor of production.

·  thinking at the margin.

·  the study of economics.

·  physical capital.

14. An example of an opportunity cost would be

·  not being able to afford a family trip because the family buys a computer.

·  buying a movie ticket.

·  the price of gasoline for a family trip.

·  buying a computer to help get better grades in school.

15. What are you doing when you make a decision at the margin?

·  taking an all or nothing approach to a problem

·  reviewing several options of how to use one additional unit of a resource

·  examining two primary options and their trade-offs before making a decision

·  refusing to make a choice

16. An opportunity cost is

·  the most desirable alternative given up as the result of a decision.

·  any good or service we barter for another good or service.

·  the cost in dollars and time of any decision.

·  a choice between two equally desirable goods or services.

17. Factors of production are

·  all the human-made goods that are used to produce other goods and services; tools and buildings.

·  land, labor, and capital; the three groups of resources that are used to make all goods and services.

·  the skills and knowledge gained by a worker through education and experience.

·  natural resources that are used to make goods and services.

18. A phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods is

·  shortage or scarcity.

·  physical capital.

·  guns or butter.

·  swords or plowshares.

19. Which of the following is a guns or butter decision?

·  A nation shifts money from building railroads to building highways.

·  A company decides to build armored tanks instead of bombs.

·  A company chooses to make more cheese and less butter.

·  A nation decides to produce fewer fighter jets and more bridges.

20. A trade-off is

·  a purchase in a marketplace.

·  an alternative that we sacrifice when we make a decision.

·  any good or service a consumer needs.

·  a factor of production.

What Is Economics?Production Possibilities Curves

21. Production possibilities graphs are important tools for

·  comparing costs and profits of producing goods and services.

·  showing ways to use an economy's productive resources.

·  demonstrating which products will sell better than others.

·  determining the underutilization of an economy's resources.

22. Efficiency is

·  using the maximum number of resources to produce goods and services.

·  using resources in such a way as to maximize the production of goods and services.

·  finding the most expensive, time-consuming way to produce a good or service.

·  replacing old ways of producing goods and services with new tools and methods.

23. The production possibilities frontier is

·  the line on a production possibilities graph that shows the maximum possible output.

·  the points on a production possibilities graph that show an underutilization of resources.

·  the points on a production possibilities graph that show the total revenue of an economy.

·  the line on a production possibilities graph that shows how production increases as new technologies are introduced.

24. A production possibilities curve is a graph that shows

·  alternative ways to use an economy's resources.

·  a company's projected product sales.

·  how a country will budge its resources.

·  how a company will pay its expenses.

25. Why are there always opportunity costs when we shift from making one product to another?

·  Some resources are better suited for use in making the first product.

·  There is always more demand for the first product than the second product.

·  Consumers must be convinced to buy the second product.

·  The quantity and quality of available resources constantly change.

26. Using fewer resources than an economy is capable of using is

·  the law of decreasing costs.

·  underutilization.

·  effectiveness.

·  the law of increasing costs.

27. Using the factors of production to make one product always means that

·  a nation can make more money.

·  a company may experience a shortage of materials.

·  fewer resources are left to make something else.

·  it is possible to make too many of that product.

28. On a production possibilities graph, a point of underutilization would appear

·  above or to the right of the production possibilities frontier.

·  directly on the production possibilities frontier.

·  just beyond the future production possibilities frontier.

·  below or to the left of the production possibilities frontier.

29. What is the name of the law that states that as we shift factors of production from making one good or service to another, the cost of producing the second item increases?

·  the law of efficient production

·  the law of effective production

·  the law of decreasing costs

·  the law of increasing costs

30. A country's production possibilities depend on

·  its technological level and its available resources.

·  its natural resources.

·  its human capital and its physical capital.

·  all of the above.