Chapter 1 Section 1 Quiz (Scarcity And The Factors Of Production)

1. Match the following definitions to their correct term. (Chpt. 1 Sec. 1)

A situation that occurs when a producer cannot offer a particular good or service at the current price.

The effort that a person devotes to a task for which the person is paid.

Physical objects such as baseballs or umbrellas.

The study of how people make decisions to satisfy their needs and wants.

Submit

2. Which of the following are factors or production? (Chpt. 1 Sec. 1)

Capital and land

Scarcity and shortages

Factors of production refer to the resources or inputs that are used in the production process to create goods and services. Capital and land are two essential factors of production. Capital refers to the machinery, equipment, buildings, and other man-made resources used in production, while land refers to the natural resources such as forests, minerals, and water bodies. Scarcity and shortages, on the other hand, do not directly relate to factors of production but rather refer to the limited availability of resources or goods in an economy.

Explanation

Factors of production refer to the resources or inputs that are used in the production process to create goods and services. Capital and land are two essential factors of production. Capital refers to the machinery, equipment, buildings, and other man-made resources used in production, while land refers to the natural resources such as forests, minerals, and water bodies. Scarcity and shortages, on the other hand, do not directly relate to factors of production but rather refer to the limited availability of resources or goods in an economy.

3. To what part of an industry does a worker's education contribute? (Chpt. 1 Sec. 1)

Human capital

Scarce resources

A worker's education contributes to the part of an industry known as human capital. Human capital refers to the skills, knowledge, and abilities that individuals possess and can apply in the workplace. By investing in education, workers enhance their human capital, making themselves more valuable to employers and increasing their potential for career advancement. This can lead to higher productivity, innovation, and overall growth within the industry.

Explanation

A worker's education contributes to the part of an industry known as human capital. Human capital refers to the skills, knowledge, and abilities that individuals possess and can apply in the workplace. By investing in education, workers enhance their human capital, making themselves more valuable to employers and increasing their potential for career advancement. This can lead to higher productivity, innovation, and overall growth within the industry.

4. Which of the following is an entrepreneur?

A person who starts an all-organic cleaning supplies business that employs others.

A person who works as a highly paid computer programmer.

An entrepreneur is someone who starts their own business and takes on the financial risk in order to make a profit. In this case, the person who starts an all-organic cleaning supplies business fits the definition of an entrepreneur because they are taking the initiative to start their own business and are also employing others, indicating that they are creating job opportunities and contributing to the economy. On the other hand, a person who works as a highly paid computer programmer may be a skilled professional, but they are not necessarily an entrepreneur as they are not starting their own business.

Explanation

An entrepreneur is someone who starts their own business and takes on the financial risk in order to make a profit. In this case, the person who starts an all-organic cleaning supplies business fits the definition of an entrepreneur because they are taking the initiative to start their own business and are also employing others, indicating that they are creating job opportunities and contributing to the economy. On the other hand, a person who works as a highly paid computer programmer may be a skilled professional, but they are not necessarily an entrepreneur as they are not starting their own business.

5. What is the difference between a shortage and scarcity?

A shortage can be temporary or long-term, but scarcity always exists.

A shortage results from rising prices; scarcity results from falling prices.

A shortage refers to a situation where the quantity demanded for a good or service exceeds the quantity supplied, leading to a temporary or long-term imbalance in the market. On the other hand, scarcity refers to the fundamental concept that resources are limited in relation to the unlimited wants and needs of individuals. Scarcity is a constant condition that exists regardless of market imbalances or fluctuations in prices. Therefore, the given answer accurately explains that while a shortage can vary in duration, scarcity is an inherent and permanent condition.

Explanation

A shortage refers to a situation where the quantity demanded for a good or service exceeds the quantity supplied, leading to a temporary or long-term imbalance in the market. On the other hand, scarcity refers to the fundamental concept that resources are limited in relation to the unlimited wants and needs of individuals. Scarcity is a constant condition that exists regardless of market imbalances or fluctuations in prices. Therefore, the given answer accurately explains that while a shortage can vary in duration, scarcity is an inherent and permanent condition.

6. What does an economist mean by the term land?

Goods and services that are produced from the land

All natural resources used to produce goods and services

An economist uses the term "land" to refer to all natural resources that are utilized in the production of goods and services. This includes resources such as forests, minerals, water, and agricultural land. By including all natural resources under the term "land," economists can analyze and understand the role of these resources in the economy and their contribution to the production process.

Explanation

An economist uses the term "land" to refer to all natural resources that are utilized in the production of goods and services. This includes resources such as forests, minerals, water, and agricultural land. By including all natural resources under the term "land," economists can analyze and understand the role of these resources in the economy and their contribution to the production process.

7. Which of the following is an example of using physical capital to save time and money? (Chpt. 1 Sec. 1)

Hiring workers to do a job

Building extra space in a factory to simplify production

Building extra space in a factory to simplify production is an example of using physical capital to save time and money. By investing in additional space, the factory can optimize its production process, allowing for more efficient workflow and potentially increasing output. This can lead to cost savings in terms of reduced labor requirements and increased productivity. Additionally, the streamlined production process can save time, enabling the factory to produce more goods in a shorter period. Overall, this investment in physical capital helps to improve efficiency and ultimately save time and money.

Explanation

Building extra space in a factory to simplify production is an example of using physical capital to save time and money. By investing in additional space, the factory can optimize its production process, allowing for more efficient workflow and potentially increasing output. This can lead to cost savings in terms of reduced labor requirements and increased productivity. Additionally, the streamlined production process can save time, enabling the factory to produce more goods in a shorter period. Overall, this investment in physical capital helps to improve efficiency and ultimately save time and money.