The Three Questions of Economics

Which statements correctly identify limitations of the factors of production? Check all that apply. *Economies must consider their limitations when answering the three questions of economics. Land is a factor of production that is limited only by the amount available. *Capital includes all money and physical facilities needed to create a product. *Labor is a factor driven by the size of the population, education, and standard of living. An economy can function well when producing outside its limitations.

*Economies must consider their limitations when answering the three questions of economics. *Capital includes all money and physical facilities needed to create a product. *Labor is a factor driven by the size of the population, education, and standard of living.

Fantastic Snack Company has spent months developing a new type of snack chip, but the chips are not selling. Which of the following is the most likely mistake Fantastic Snack Company made? conserving too valuable resources spending capital it did not have not researching production methods *not meeting the wants of its consumers

*not meeting the wants of its consumers

Which of the following is an example of a labor resource? money available to be invested in a company water held in a reservoir a city's population electricity produced by a nearby power plant

A city's population

Which factors are considered when deciding how to make goods and services? Check all that apply. determining who has the greatest need finances of prospective buyers methods traditionally used to make a good ways to produce items at a lower cost or higher quality ways to make the biggest profit

Methods traditionally used to make a good Ways to produce items at a lower cost or higher quality Ways to make the biggest profit

The three questions of economics best help in making decisions about __________.

Production

One of the three main questions of economics addresses who should: produce goods and services. market goods and services. receive goods and services. distribute goods and services.

Receive goods and services

One of the three economic questions deals with deciding: what goods and services should be produced. what the costs of production should be. how goods and services will be marketed. how consumers will receive products.

What goods and services should be produced.

Use the drop-down menus to complete each sentence. Land, labor, and capital also are known as factors of production Economies must answer the three economic questions because resources are limited If an economy does not answer the three economic questions, resources may run out Negative consequences can result when an economy does not answer the three economic questions.

production/limited/run out/Negative

The three questions of economics are based on decisions made by economies. What statement best describes why economies must make these decisions? Economies must make these decisions because resources are unlimited, but production must be limited. *Economies must make these decisions because resources are limited. Economies must make these decisions because consumers cannot make decisions on their own. Economies must make these decisions to prevent producers from over-producing.

*Economies must make these decisions because resources are limited.

Which of the following is an example of a land resource? *cow factory employee tractor

*cow

One of the main questions of economics involves deciding upon the method for distributing goods and services. *creating goods and services. pricing goods and services. enhancing goods and services.

*creating goods and services.

Which of the following best illustrates the importance of addressing the three questions of economics? People's desires and needs are always changing. Businesses need to use limited resources wisely. Traditional methods of production are outdated. Businesses need to limit production.

Businesses need to use limited resources wisely.

Read the following scenario. A clothing company wants to expand into new regions. It is looking at an urban area with a large number of vacant warehouses. The population is made up of people with average educations and a lower standard of living. The company is experiencing slower sales but has hopes that product will take off and be successful. Which of the factors of production will the company need to address most closely when making its decision to expand? land capital land and labor labor and capital

Capital

Resources needed to provide goods or services are called: factors of production. facets of production. functions of production. facts of production.

Factors of production

Which of the following will be accomplished by efficient allocations of the factors of production? guaranteeing economic success understanding whether a product will fail fulfilling many needs and wants of society replenishment of limited resources

Fulfilling many needs and wants of society

Which consideration must be addressed when deciding for whom to produce? Who can be most creative with the product? Who has the largest resource pool? Who has the greatest need? Who can bring in the greatest profit?

Who has the greatest need?