2. 4 Factors of Production Economies PrinciplesDefinitionsPPF 10 20 30 40 50

3. Question 1 - 10 What are the 4 factors of production?

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

5. Question 1 - 20 What are the two types of capital?

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

7. Question 1 - 30 How do Economists define “Land”?

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

9. Question 1 - 40 The following could be factors of production: – Capital resources – Human resources – Natural resources – True of False

10. Answer 1 – 40 True

11. Question 1 - 50 This term refers to a product’s usefulness.

12. Answer 1 – 50 Utility

13. Question 2 - 10 What is a mixed economy?

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

15. Question 2 - 20 The American economy is a.

16. Answer 2 – 20 Mixed Economy

17. Question 2 - 30 There are a few true market economies in the world. True of False

18. Answer 2 – 30 False

19. Question 2 - 40 Match the following economist with the type of economies they created Karl MarxMarket John Keynes Mixed Adam SmithCommand

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

21. Question 2 - 50 The “invisible hand” refer to:

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

23. Question 3 - 10 The heart of the economic problem is to:

24. Answer 3 – 10 Allocate limited resources among unlimited uses.

25. Question 3 - 20 What must be given up to gain a unit of a good is that good’s

26. Answer 3 – 20 Opportunity cost

27. Question 3 - 30 The circular flow model represents

28. Answer 3 – 30 The resource and product markets

29. Question 3 - 40 The goal of economic stability has two concerns:

30. Answer 3 – 40 Full employment and stable prices

31. Question 3 - 50 What would help a company improve efficiency?

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

33. Question 4 - 10 Economists use the term allocation to refer to

34. Answer 4 – 10 Deciding who gets good and services

35. Question 4 - 20 Economics is primarily concerned with

36. Answer 4 – 20 The allocation of scarce resources

37. Question 4 - 30 Economics is the study of the relationship between

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

39. Question 4 - 40 Economic efficiency is making the best use of

40. Answer 4 – 40 Scarce resources

41. Question 4 - 50 What is specialization?

42. Answer 4 – 50 individualized focus on one task

43. Question 5 - 10 What can cause an outward shift on the PPF?

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

45. Question 5 - 20 What is illustrated by the PPC

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

47. Question 5 - 30 What does point x and y mean?

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

49. Question 5 - 40 As the economy moves from point D to E:

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

51. Question 5 - 50 Why might an economy produce at a level of output beneath its PPF?

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