4 Factors of Production Economies PrinciplesDefinitionsPPF

Question What are the 4 factors of production?

Answer 1 – 10 (C.E.L.L.) – Capital – Entrepreneurship – Land – Labor

Question What are the two types of capital?

Answer 1 – 20 Capital Goods (man-made) Human Capital (the know-how)

Question How do Economists define “Land”?

Answer 1 – 30 Not just Real Estate but also natural resources

Question The following could be factors of production: – Capital resources – Human resources – Natural resources – True of False

Answer 1 – 40 True

Question This term refers to a product’s usefulness.

Answer 1 – 50 Utility

Question What is a mixed economy?

Answer 2 – 10 A combination of a market and command economy.

Question The American economy is a.

Answer 2 – 20 Mixed Economy

Question There are a few true market economies in the world. True of False

Answer 2 – 30 False

Question Match the following economist with the type of economies they created Karl MarxMarket John Keynes Mixed Adam SmithCommand

Answer 2 – 40 Karl Marx- Command John Keynes- Mixed Adam Smith- Market

Question The “invisible hand” refer to:

Answer 2 – 50 The fact that individuals, pursuing their own self-interest, achieve the best good for all when operating in the market economy.

Question The heart of the economic problem is to:

Answer 3 – 10 Allocate limited resources among unlimited uses.

Question What must be given up to gain a unit of a good is that good’s

Answer 3 – 20 Opportunity cost

Question The circular flow model represents

Answer 3 – 30 The resource and product markets

Question The goal of economic stability has two concerns:

Answer 3 – 40 Full employment and stable prices

Question What would help a company improve efficiency?

Answer 3 – 50 Introduce division of labor Specialization Advances in technology

Question Economists use the term allocation to refer to

Answer 4 – 10 Deciding who gets good and services

Question Economics is primarily concerned with

Answer 4 – 20 The allocation of scarce resources

Question Economics is the study of the relationship between

Answer 4 – 30 People’s unlimited wants and their scare resources

Question Economic efficiency is making the best use of

Answer 4 – 40 Scarce resources

Question What is specialization?

Answer 4 – 50 individualized focus on one task

Question What can cause an outward shift on the PPF?

Answer 5 – 10 Increase in resources or an advancement in technology

Question What is illustrated by the PPC

Answer 5 – 20 All combinations of two goods that can be produced given current resources

Question What does point x and y mean?

Answer 5 – 30 Point X= inefficiency Point Y= unattainable/ impossible

Question As the economy moves from point D to E:

Answer 5 – 40 It gives up 3 units of guns and gains 1 unit of butter

Question Why might an economy produce at a level of output beneath its PPF?

Answer 5 – 50 Resources or technology is not being used efficiently