Needs, Wants, Scarcity & Specialization

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Questions and Answers

Which of the following best illustrates the concept of opportunity cost?

A consumer choosing to buy a new smartphone over a weekend getaway. (correct)
A company specializing in producing a single type of product to maximize efficiency.
A business investing in new machinery to increase production capacity.
A government increasing taxes to fund public services such as healthcare and education.

Specialization always leads to increased job satisfaction among employees.

False (B)

Explain how scarcity influences economic decision-making for both consumers and businesses.

Scarcity forces consumers and businesses to make choices about how to allocate limited resources to satisfy unlimited wants and needs, influencing decisions on what to consume or produce.

The factor of production that includes natural resources like oil, gas, and timber is known as ______.

land Signup and view all the answers

Match each factor of production with its corresponding role in the operation of a bakery:

Land = The physical location of the bakery and any natural resources used, such as water. Labor = The bakers, cashiers, and other employees who work at the bakery. Capital = The ovens, mixers, and other equipment used to bake the goods. Enterprise = The owner who organizes and manages the bakery. Signup and view all the answers

Which of the following is a potential disadvantage of the division of labor?

Increased boredom among workers. (D) Signup and view all the answers

Adding value to a product always involves increasing the cost of production.

False (B) Signup and view all the answers

Describe the primary goal of business activity in terms of needs, wants, and resources.

The primary goal of business activity is to combine scarce resources to produce goods and services that satisfy customers' needs and wants. Signup and view all the answers

Flashcards

Needs

Essentials for survival, like food and shelter.

Wants

Desires not essential for survival, like luxury goods.