Economics Review: Factors of Production, Scarcity, and Opportunity Costs, Slides of Economics

Download Economics Review: Factors of Production, Scarcity, and Opportunity Costs and more Slides Economics in PDF only on Docsity! Intro to Economics Review Name __________________________ Hour ________ 1. List the five factors of production and give and example of each. ____________land_________ ___________________________ ___________labor__________ ___________________________ ___________capital_________ ___________________________ _________entrepunuership___ ___________________________ __human capital or technology_ ___________________________ 2. Describe a situation and then explain the opportunity cost of that action. 3. List the four needs according to the district book. ________Food_____________ ________Shelter____________ ________Clothing___________ ________Education (U.S. only_ 4. Explain the difference between a good and a service. A good is tangible (you can touch it) a service is something someone performs for someone else and therefore is intangible (cannot be touched) 5. Define the following terms: A. Economics - Economics is the study of how people and societies choose to use limited resources to try to satisfy unlimited wants B. Scarcity - humans possess unlimited wants while we have limited resources. The earth has a finite (limited) amount of resources. C. Opportunity Costs - the next best alternative given up as a result of a decision. 6. What is the major difference between scarcity and shortage? Scarcity is permanent where as shortage is temporary 7. Give two examples for each of the following situations: A. A production possibilities curve moves down and to the left The examples must show a loss of resources (land, labor or capital) B. A production possibilities curve moves up and to the right The examples must show a gain in resources 8. ___competition_ is the regulating force in a market economy? 9. Define specialization (from international trade) and then explain how specialization improves an economy. MAKE SURE YOU DO BOTH PARTS Concentration of the productive efforts of a country on a limited number of activities. It makes the economy more efficient. For questions 9-15 answer Traditional, Market, Command or Mixed 10. This economic system has the lowest standard of living Traditional 11. The role of women is poor in this economic system Traditional 12. What to save is not important because there is rarely anything to save Traditional 13. All countries today have this type of economy Mixed 14. This type of system was used the most historically Traditional 15. The government remains hands off or not involved in this economic system Market 16. Self interest drives people to be productive in this economic system Market 17. Draw a production possibility graph. Use two products that would use the same resources. Place two point showing the opportunity cost of producing more of one product. The production possibilities curve should be a straight line. The two points should be on the line showing that if you gain in one product you will lose (opportunity cost) in the other product 28. Due to a series of severe forest fires throughout the country, the supply of lumber has been dramatically reduced. Which of the following would correctly describe the consequences of this situation? A. The amount of paper supplies will increase. B. The number of paper mill workers will increase. C. The amount of plastic rulers will increase. D. The number of pencils will increase. 29. Minerals would be an example of which factor of production? A. Land B. Labor C. Capital D. Entrepreneurship 30. What is a factory building an example of? A. technology B. an economic trade-off C. human capital D. physical capital 31. Which of the following makes someone an entrepreneur? A. earning a lot of money as a computer programmer B. becoming a highly paid athlete C. running a service that hires people to install sprinkler systems in a lawn D. inventing and selling the rights to manufacture a computer game 32. Production possibilities curve illustrate A. the choices consumers can make. B. combinations of 2 goods that can be produced. C. the latest technology D. choices a society can make. 33. Due to a strike by steel workers, the amount of steel available has been reduced, resulting in a drop in the making of automobiles. Which of the following would correctly describe the most likely consequences of the above situation? A. The number of bus riders will increase. B. The number of auto workers will increase. C. The sale of gas will increase. D. The sale of tires will increase. 34. One example of thinking at the margin is: A. determining whether it is better to spend one’s savings on a new CD player or on a television B. deciding whether the benefit of working two extra hours per day is worth the sacrifice of study time C. putting all of one’s money in a savings account because the interest rates are so high D. deciding to buy a car one doesn’t really like because it is significantly less expensive than one’s preferred car 35. Which one of the following is not a key economic question? A. What goods and service should be produced? B. How should these goods and services be produced? C. Who consumes these goods and service? D. How should it be ensured that goods and service are paid for? 36. What is the basic economic problem of life? A. credit B. technology C. scarcity D. sacrifice 37. Which one of the following is a “guns and Butter question” decision? A. A person must decide whether to replace her old TV with a regular TV or a flat screen TV. B. A business has to whether to build a new factory or remodel the old factory. C. A person must decide whether to remodel the kitchen or buy a new entertainment system. D. A country must decide whether to use its steel to build new tanks or new SUV’s. 38. The decline in the price of gasoline resulted in an increase in sales of large automobiles. Which scarcity concept is involved in this situation? A. Factor of Production B. Opportunity Cost C. Substitute Good D. Complementary Good 39. There are 4 factors of production, land, labor, capital, and entrepreneurial skills. Which of the following groups’ best illustrates these factors? A. farmers, investors, manufacturers, and Bill Gates B. iron ore, firefighters, cement trucks and Henry Ford C. rent, workers, money and Henry Ford. D. oil, taxi drivers, bonds and Bill Gates 40. Sports are far less necessary than food. Yet they pay Football players more than farmers. A. Football players are really entertainers rather than producers. B. Great players are scarce, given the demand for their services. C. There are fewer football players as compared the number of farmers. D. Football owners are rich and want to pay their players well. 41. What is the opportunity cost of a decision? A. the series of alternative decisions that could have been made B. the best way the question could have been decided C. the different ways that a person might have made a decision D. the most desirable alternative given up for the decision 42. The government of a nation must make a decision between increasing military spending and subsidizing wheat farmers. This kind of decision is a: A. global trade-off B. decision at the margin C. guns and butter D. basic economic decision 43. What could cause a production possibilities curve to move down and to the left? A. A nation loses land after being defeated in a war B. A baby boom 20 years ago resulted in a large number of young adults in the population today C. An increase in the use of computer technology speeds up production D. Thousands of investors from overseas invest money in a nation’s economy 44. Which of the following actions is an example of an improvement in human capitol? A. Carlos hires three workers for his business B. Frank’s Furniture trains employees to use computers C. Tasha applies for a job as an engineer D. The city of Upland builds a new nursing home