Foundations of Economics Review

Scarcity is a basic economic problem because —

• resources are limited

• governments limit production

• opportunity costs limit demand

• people have trouble making choices

The basic idea of choice presents which of the problems in economics?

• People get to decide what they want.

• Businesses can sell what they want.

• Decisions produce costs.

• Choice is a way of life.

What is the relationship between scarcity and decision making in economics?

• Consumers are more likely to choose goods and services that are scarce.

• When certain goods are scarce it complicates decision making.

• Individuals must choose how to use scarce resources to satisfy their wants.

•  When resources are scarce the government will prioritize certain goods to influence

  decision making.

What basic economic question is addressed in the press release?

• How to produce?

• What to produce?

• For whom to produce?

• How much to produce?

The situation described in the excerpt is an example of a society addressing an economic question by —

• responding to shortages by increasing production

• reacting to consumer demands by importing more

• allocating resources through a government program

• distributing supplies to those willing to pay the most

In a free market society, the answer to the question about how much to produce is determined by —

• census data

• profit projections

• consumer demand

• government quotes

Which of the following represents capital needed to start a tailoring or garment making business?

• Dressmakers

• Building space

• Marketing team

• Sewing machines

Which factor of production completes the excerpt?

• Laborers

• Landlords

• Entrepreneurs

• Capital investors

Which resource would be considered the factor of production called land?

• Coal

• Factory

• Money

• Tractor

Paying rent instead of purchasing tickets to a concert is an example of —

• scarcity

• property rights

• opportunity cost

• circular flow model