IAL Economics Revision: Chapter 2

What is the basic economic problem?

• Resources are unlimited and wants are scarce

• Resources are scarce and wants are unlimited

• Resources and wants are both unlimited

• Resources and wants are both scarce

Which of the following is considered as a factor of production?

• Money

• Land

• Technology

• Advertising

What are economic goods?

• Goods that are unlimited in supply

• Goods that have no opportunity cost

• Goods that are scarce because their use has an opportunity cost

• Goods that are produced without any resources

What is the role of entrepreneurship in the production process?

• To allocate resources between competing uses

• To seek out profitable opportunities for production and take risks

• To transform working capital into goods and services

• To exploit non-renewable resources

Who are entrepreneurs?

• Individuals who seek out profitable opportunities for production and take risks

• Individuals who allocate resources between competing uses

• Individuals who transform working capital into goods and services

• Individuals who exploit non-renewable resources

What are the factors of production?

• Land, labor, capital, and entrepreneurship

• Money, labor, capital, and entrepreneurship

• Land, labor, technology, and entrepreneurship

• Land, labor, capital, and advertising

What are fixed capital resources?

• Resources that are unlimited in supply

• Resources that can be exploited over and over again

• Resources used to transform working capital into goods and services

• Resources such as factories and hospitals

What are free goods?

• Goods that are unlimited in supply

• Goods that have no opportunity cost

• Goods that are scarce because their use has an opportunity cost

• Goods that are produced without any resources

What is labor as a factor of production?

• The workforce

• The stock of manufactured resources

• The seeking out of profitable opportunities for production

• The exploitation of non-renewable resources

What is land as a factor of production?

• The workforce

• The stock of manufactured resources

• All natural resources

• The exploitation of non-renewable resources