01:220:103 Chapter Notes - Chapter 2: Planned Economy, Invisible Hand, Absolute Advantage

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harlequinsnake190

24 Jan 2017

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2: the economic problem - scarcity & choice. The starting point of economics is that human wants are unlimited but resources are not. Resources include products of nautre like minerals and timber, products of past generations like buildings and factories, and the time and talents of the human population. Capital: things that are produced and then used in the production of other goods or services (capital goods) Factors of production: the inputs into the process of production - another term for resources. Production: the process that transforms scarce resources into useful goods and services. Given the scarcity of time and resources, should the lone islander decide to do one activity, they give up time to do others - this is the opportunity cost. Opportunity cost: the best alternative that we give up when we make a choice or decision. Scarcity and choice in an economy of two or more.

Related Questions

true or false

Human and nonhuman resources are the inputs used to produce goods and services.

Since resources are scarce, society must make choices about what to produce.

Consumers decide what gets produced in Japan.

Microeconomics is the study of aggregate behavior in the economy.

The three basic questions in economics are who, what and why.

The law of demand states that the quantity demanded of any good is inversely related to its price.

coppermole152

True or False

When income falls, the demand for a normal good shifts to the left.

Human and nonhuman resources are the inputs used to produce goods and services.

Since resources are scarce, society must make choices about what to produce.

Consumers decide what gets produced in Japan.

Microeconomics is the study of aggregate behavior in the economy.

violetmacaw855

1. A consequence of the economic problem of scarcity is that:

a. Choices have to be made about how resources are used.

b. There is never too much of any good or service produced.

c. The production of goods and services must be controlled by the government.

d. The production-possibilities curve is bowed outward.

2. Microeconomics is concerned with issues such as:

a. The level of inflation in the economy

b. The demand for bottled water by individuals.

c. Maintaining a strong level of economic growth.

d. All of the choices.

3. In economics, scarcity means that:

a. A shortage of a particular good will cause the price to fall

b. A production possibilities curve cannot accurately represent the tradeoff between two goods.

c. Society's desires exceed the want-satisfying capability of the resources available to satisfy those desires.

d. The market mechanism has failed

4. A city's decision to limit smoking in public areas is an example of

a. The invisible hand at work.

b. The market mechanism at work.

c. Market failure.

d. Government intervention

brownsea-lion330

01:220:103 Chapter Notes - Chapter 2: Planned Economy, Invisible Hand, Absolute Advantage

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