Questions and Answers
In a situation where resources are unlimited, wants are limited, and scarcity is absent.
False
In a production process, producing more of one good or service always means producing less of something else.
True
Central planning is a characteristic of a free market economy.
False
Economic growth is solely determined by the increase in population.
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A want is a basic requirement for survival, such as food and clothing.
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Study Notes
Economy Basics
- False: Resources are limited, not unlimited, and wants are unlimited, leading to the fundamental economic problem of scarcity.
- False: Production efficiency is a situation in which we cannot produce more of one good or service without producing less of something else.
Scarcity and Resources
- Scarcity is the condition that results from society not having enough resources to produce all the things people would like to have.
- True: The scarce resources have alternative uses.
Economy Systems
- False: In a free market economy, it is not central planning that determines what to produce, but rather individual economic agents making decisions based on market forces.
Microeconomics
- True: Microeconomics studies the behavior of individual units of an economy, such as consumers, firms, and industries.
Production Methods
- True: If a community has many unemployed people, using labor-intensive methods of production might be better.
Economic Growth
- True: Economic growth occurs when real GDP per capita increases over time.
Economic Value
- True: For something to have monetary value, economists decide that it must be scarce and have utility, meaning it must be useful and hard to find.
Basic Needs
- True: A need is a basic requirement for survival, such as food, clothing, and shelter.
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