Question

a. key terms and concepts
directions: match each item with one of the descriptions below.

1. limits the supply of the factors of production
2. work for which a person is paid
3. physical objects such as baseballs or umbrellas
4. the study of how people make choices to meet their needs and wants
5. all natural resources used to produce goods and services
6. knowledge gained from education and experience

b. main ideas
directions: write the letter of the correct answer in the blank provided.

1. which of the following is an example of changing physical capital? a. hiring more workers to do a job b. building extra space in a factory c. switching to cheaper fuel d. lowering workers wages
2. what is the difference between a shortage and scarcity? a. scarcity always exists. b. scarcity results from falling prices. c. scarcity concerns a single item. d. there is no real difference.
3. which of the following are factors of production? a. capital and land b. scarcity and shortages c. technology and productivity d. economics and business decisions
4. which of the following people is an entrepreneur? a. a highly - paid singer b. a person who teaches courses at a college c. a highly - paid computer programmer d. a person who starts a cleaning supplies business

Explanation:

1. Scarcity limits the supply of factors of production.
2. Labor is work for which a person is paid.
3. Goods are physical objects like baseballs or umbrellas.
4. Economics is the study of how people make choices to meet needs and wants.
5. Land consists of all natural resources used to produce goods and services.
6. Human capital is knowledge gained from education and experience.
7. Building extra space in a factory is changing physical capital as it's a change in physical assets.
8. Scarcity always exists as it's a fundamental economic condition of limited resources relative to unlimited wants, while shortages are temporary.
9. Capital and land are factors of production.
10. An entrepreneur is a person who starts a business, like someone starting a cleaning - supplies business.

Answer:

1. f
2. d
3. b
4. a
5. e
6. c
7. b
8. a
9. a
10. d