Fundamentals of Econ-Teacher Notes Pages 1-12

What is scarcity in economics?

• The condition where unlimited wants exceed limited resources.

• The condition where resources are unlimited and wants are limited.

• The condition where resources and wants are both unlimited.

• The condition where resources are abundant and wants are scarce.

Which of the following is NOT considered a scarce resource?

• Air

• Land

• Labor

• Capital

What is an example of a scarce and desirable resource?

• Crude oil

• Pollution

• Sunshine

• Knowledge

Why must individuals, businesses, and governments make choices about resource use?

• Because resources are scarce.

• Because resources are unlimited.

• Because wants are limited.

• Because resources are abundant.

What is the difference between scarcity and a shortage?

• Scarcity is temporary, while shortages always exist.

• Scarcity always exists, while shortages are temporary.

• Both scarcity and shortages are temporary.

• Both scarcity and shortages always exist.

Which of the following is NOT a strategy for allocating scarce resources?

• Price

• Majority rule

• Sharing

• Unlimited supply

During the COVID pandemic, what caused the shortage of toilet paper in homes?

• Decreased demand

• Increased supply

• Increased demand

• Decreased supply

What is the most common allocation strategy in a market economy?

• Lottery

• Price

• Authority

• Personal characteristics

What does the 'majority rule' allocation strategy involve?

• Distributing resources based on price

• A group of people deciding how a resource is distributed

• Allocating resources to the fastest person

• Using a lottery system to distribute resources

Which allocation strategy relies on intimidation or threat of physical harm?

• Contest

• Force

• Sharing

• Lottery