Econ 101- 2.1 Scarcity – Flashcards
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Does the richest person in the world face the problem of​ scarcity?
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Yes, because even if you have money you will never be able to satisfy all of your wants and must therefore make choices.
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Scarcity
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results from unlimited wants coupled with limited resources.
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The existence of scarcity requires
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that people must make choices and face​ trade-offs in using their resources.
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Any activity that results in the conversion of resources into products that can be used in consumption is called
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production
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Factors of production include
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​land, labor, physical​ capital, human capital and entrepreneurship.
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Tim goes to a design academy to become a toy designer. This is an example of
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an investment in human capital.
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Economic goods are
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goods that are scarce.
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Which of the following is not a factor of production
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money
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Why do economists avoid making the distinction between wants and needs​?
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The term need is subjective making it difficult to distinguish between something someone wants and something they need.
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Many state governments claim a shortage of funds because there are​ "unmet needs." This claim is
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false because of scarcity
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Each individual must make choices because
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resources are limited and therefore cannot satisfy​ one's many competing wants.
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When an individual proclaims the need for a new​ car, the person typically means
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they want something they currently do not have.
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Scarcity is the same as a shortage.
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False
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Entrepreneurship is the component of human resources that performs the functions of​ organizing, managing, and assembling the other factors of production to create and operate business ventures.
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True
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The factor of production that consists of factories and equipment used in​ production, as well as improvements to natural​ resources, is called
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Physical Capital
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Economic goods are goods for which the quantity demanded exceeds the quantity supplied at a zero price.
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True
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People have​ ________ wants and​ ________ resources to deal with those wants.
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unlimited; limited
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________ is the situation in which human wants always exceed what can be produced with the limited resources and time that nature makes available.
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Scarcity
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We use scarce​ resources, such​ as__________, __________,​ __________ and​ __________ capital, and​ __________, to produce economic goods- goods
that are desired but are not directly obtainable from nature to the extent demanded or desired at a zero price.
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​land; labor;​ physical; human; entrepreneurship
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_________ are unlimited. They include all material desires and all nonmaterial​ desires, such as​ love, affection,​ power, and prestige
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Wants
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The concept of ______ is difficult to define objectively for every person.​ Consequently, we simply consider every​ person's wants to be unlimited. In a world of ​scarcity, satisfaction of one want necessarily means nonsatisfaction of one or more other wants.
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need
