What is the difference between shortage and scarcity?

shortage is temporary or long term, scarcity always exists

The economic concept of guns or butter means that

government decides military or consumer goods

Every decision involves trade-offs because

everyone's resources are limited

What line on a PPC shows the amount of goods produced?

production possibilities frontier

Which of the following is an example of using physical capital to save time and money?

building extra space in a factory to simplify production

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Topic 1 Final Exam Review

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Answers

1
What is the difference between shortage and scarcity?
shortage is temporary or long term, scarcity always exists
there is no real difference
shortage is lack of all goods; scarcity is single item
shortage is from rising costs; scarcity from falling prices
2
A production possibilities curve shows the relationship between the production of
two types of farm goods
farm goods and factory goods
any two categories of goods
two types of factory goods
3
The economic concept of guns or butter means that
company decides between making guns or butter
government decides military or consumer goods
sports or equipment
4
Every decision involves trade-offs because
everyone's resources are limited
some people have more money than others
some decisions are made for business, others for society
everyone has to make decisions
5
Increasing the number of laborers in an economy generally causes a(n)
decrease in the PPC
increase in opportunity cost
decrease in opportunity cost
increase in the PPC
6
Which of the following are factors of production
technology and productivity
capital and land
scarcity and shortages
economic and business decisions
7
What information is needed to make a decision at the margin
more than three alternatives
cost to produce each unit
factors of production
opportunity costs
8
Which would a company do to increase its human capital?
build a company cafeteria
hire more part-time workers
pay for employees' education
lease cars for employees
9
An economy that is producing the maximum amount of goods and services is considered
trading off
efficient
growing
underutilized
10
What line on a PPC shows the amount of goods produced?
utilization of resources
maximum possible production line
opportunity cost line
production possibilities frontier
11
Which of the following is an example of using physical capital to save time and money?
hiring more workers to do a job
switching from oil to coal to make production cheaper
lowering workers' wages to increase profits
building extra space in a factory to simplify production
12
If you choose between two summer jobs, the one you do not choose is called the
decision at the margin
opportunity at the margin
trade-off
opportunity cost
13
A factory building is an example of which factor of production
land
human capital
physical capital
labor

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