Chapter 2: Economic Resources and Systems
Chapter Practice Review Quiz
1.. What is scarcity? C) an entrepreneur
A) unlimited wants and needs D) a business with substantial labor resources
B) a shortage of resources
8. Which refers to how people satisfy their needs and C) a lack of goods and services
wants by making choices? D) limited expenses
2. Which is NOT a factor of production? B) economics
A) natural resources C) equilibrium
B) labor D) opportunity
D) the marketplace 9. What is opportunity cost?
A) the income people receive by taking risks
3. Which statement about natural resources is true? B) giving up the chance to use a resource for one thing
instead of another A) Water is renewable because it can be reproduced.
B) Lumber is not renewable because it takes a long time to C) the methods and labor used to produce a good grow new trees. D) the income people have to purchase goods and
services C) Coal is renewable because there is so much of it still in the ground.
10. What are two basic types of economic systems? D) Agricultural products are renewable because new crops
can be grown each season A) supply and demand
B) competition and profit
4. Which statement about natural resources is NOT true? C) private enterprise and free enterprise A) Natural resources can be processed to make goods. D) market economy and command economy
B) The amount of natural resources available to a society
has little effect on its economy.. 11. Which is a characteristic of capitalism? C) Synthetic materials such as nylon can be made from A) Resources are privately owned. natural resources. B) Resources are shared equally. D) Countries that have scarce natural resources must get C) There is an even distribution of income. them from somewhere else. D) Prices are determined by government planners.
12. Which is true about people working in a market 5. Which means the same as human resources?
economy who have labor skills that are in demand? A) capital resources
B) service providers A) Their earnings are the same as other workers their age. C) labor resources B) Their incomes tend to be lower than others whose skills
are not in demand. D) unskilled workers
C) Their incomes tend to be higher than others whose 6. Which is an example of a capital resource? skills are not in demand.
A) a machine used to make molded plastic toys D) Their earnings are not related to demand.
B) a customer service representative
13. Which is most important in determining the price of a C) money borrowed from a bank
product or service? D) the president of a company
A) profit and competition
7. Which is most likely to profit from society's changing B) business owners' preferences wants and needs? C) equilibrium pricing
A) a business with existing capital resources D) supply and demand
B) a producer of goods
14. Which is most likely to happen when the price for a good or service is high?
A) demand falls
B) profits rise
C) supply increases
D) competition decreases
15. Which is a characteristic of socialism? A) Individuals own all major resources. B) Major industries are government owned. C) There is little choice for consumers. D) There is no incentive to create better products.
from capital, or money; they are the things Answer Hints
used to produce goods and services.1.
2. P23 7. C
Feedback: Entrepreneurial resources meet 3. P24
society's changing wants and needs. 4. P24
5. P25 8. B
Feedback: Economics is the study of how 6. P25
individuals and groups of individuals strive to 7. P26
satisfy their needs and wants by making 8. P28
choices. 9. P28
10. P29 9. B
Feedback: Deciding to use a resource for one 11. P29
purpose means giving up the opportunity to 12. P29
use it for something else. This is called an 13. P29
opportunity cost. 14. P 29
15. P31 10. D
Feedback: Two basic types of economic
systems are a market economy and a Answer Keys:
command economy. 1. B
Feedback: The principle of scarcity states that 11. A
resources are in limited supply. Feedback: A market economy can also be
called a private enterprise system, or 2. D
Feedback: There are four factors of capitalism. In a market economy, resources production: natural resources, labor are privately owned.
resources, capital resources, and 12. C
entrepreneurial resources. Feedback: People who have labor skills that
are in demand earn higher incomes than 3. D
Feedback: Some natural resources such as those who do not.
wheat and cattle are renewable because they 13. D
can be reproduced; coal, iron, and oil are Feedback: The price for an item is determined nonrenewable. through the interactions of supply and
demand. 4. B
Feedback: The amount of natural resources 14. A
available to a society has a direct effect on its Feedback: Demand is that amount or quantity economy. of goods and services that consumers are
willing to buy at various prices. The higher the 5. C
Feedback: Labor resources are people who price, the less consumers will buy.
make the goods and services for which they 15. B
are paid; teachers, coal miners, and farm Feedback: In a moderate command economy workers are all human resources. there is some private enterprise but major
resources such as airlines and steel are 6. A
Feedback: Capital resources are different owned by the state.