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Any resources that are made by humans and used to create other goods and services are called
capital
An example of a shortage is limited amounts of
food available because the trucks carrying it are on strike.
The resources used to make all goods and services are the
factors of production
An efficient economy is one that
uses its resources to make the most goods and services.
Why are all goods and services scarce?
All resources are scarce.
What is the opportunity cost of a decision?
the most desirable alternative given up for the decision
the most desirable alternative given up for the decision
Which of the following is the kind of decision that can be made at the margin?
whether or not to build an extra room on a home
What is a factory building an example of?
physical capital
The government of a country must make a decision between spending money on a hospital or spending the same amount on border security. What kind of decision is this?
guns or butter
How would you describe an economy that uses its resources to make the greatest possible number of goods and services?
efficient
In economics, "needs" refer to __________
the basic, minimal things people must have to survive.
Scarcity of resources is always present because __________
competing alternative uses for resources always exist.
The main factors necessary for the production of goods and services are __________
capital, land, entrepreneurship, and labor.
If your city made a trade-off to spend $1 million on a recycling facility instead of a fitness and health center, the opportunity cost of a cleaner environment would be __________
fewer fit and healthy people.
A production possibilities curve is used by economists to show __________
all of the above.
Which of the following statements is NOT true about the use of economic models?
Economists use economic models to make value judgments about economic decisions.
Economists do not all agree on the same solutions to problems because __________
they have differing opinions, beliefs, and social views.
Which of the following are factors of production?
capital and land
A decision is made at the margin when each alternative considers
cost and benefit ranked in progressive units.
To what part of an industry does a worker’s education contribute?
human capital
If a person who wants to buy a compact disc (CD) has just enough money to buy one, and chooses CD A instead of CD B, then CD B is the
opportunity cost
Every decision involves trade-offs because
everyone’s resources are limited.
23. A production possibilities curve shows the relationship between the production of
any two categories of goods.
Why do people need to buy and sell products or services?
No one is self sufficient.
What is the difference between a shortage and scarcity?
A shortage can be temporary or long-term, but scarcity always exists