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</p> Signup and view all the answers

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

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

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