Microeconomics Basics: Introduction to Scarcity and Resources
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Questions and Answers

What is one of the core challenges faced by an economy?

  • Overproduction of goods
  • Scarcity of resources (correct)
  • Unlimited resources
  • Inefficient production

Why does every society have to face the problem of choice?

  • To manage unlimited resources
  • Inefficient distribution of goods
  • Scarcity of resources (correct)
  • Due to overproduction of goods

What must society do to fulfill its needs, according to the text?

  • Use limited resources in the best possible way (correct)
  • Overproduce goods
  • Manage unlimited resources efficiently
  • Ignore scarcity of resources

What gives rise to the problem of choice in an economy?

<p>Scarcity of resources (D)</p> Signup and view all the answers

What are some examples of goods and services mentioned in the text?

<p>All of the above (D)</p> Signup and view all the answers

What are some of the basic economic activities mentioned in the text?

<p>Production, exchange, and consumption of goods and services (A)</p> Signup and view all the answers

What does the production possibility frontier provide?

<p>The maximum amount of goods and services that can be produced from a given amount of resources and technological knowledge (B)</p> Signup and view all the answers

What is the production possibility frontier?

<p>The collection of all possible combinations of goods and services that can be produced from a given amount of resources and technological knowledge (D)</p> Signup and view all the answers

What is the trade-off mentioned in the text?

<p>The decision between investing in consumption goods or investment goods (B)</p> Signup and view all the answers

What is the method of production mentioned in the text?

<p>The decision on whether to use more labor or more machines and which technologies to adopt in the production of goods (C)</p> Signup and view all the answers

What does the production possibility set represent?

<p>The collection of all possible combinations of goods and services that can be produced from a given amount of resources and technological knowledge (D)</p> Signup and view all the answers

What is the allocation of scarce resources?

<p>The problem of allocating scarce resources to the production of different possible goods and services (C)</p> Signup and view all the answers

What is represented by any point on or below the production possibility curve?

<p>Combination of goods that can be produced efficiently with available resources (A)</p> Signup and view all the answers

What does every society have to decide upon in production?

<p>Whether to use more labor or more machines in the production of goods (C)</p> Signup and view all the answers

What does the production possibility curve give?

<p>Maximum output level for one good at a given level of another good (D)</p> Signup and view all the answers

What does every economy face in terms of allocating resources?

<p>Problem of allocating scarce resources to different possible goods and services (A)</p> Signup and view all the answers

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