Chapter 2

Question 1

Four Productive Resources

Answer 1

Labor
Land/Natural Resources
Capital
Entrepreneur

Question 2

Four Resource Paymments

Answer 2

Wages
Rent
Interest
Profit

Question 3

Four Efficient Uses of Resources/Define

Answer 3

Full employment
-Economy should provide employment for all who are willing to work
Production efficiency
-Producing the best possible product at the least possible cost
Allocation efficiency
-Producing what people want
Distribution efficiency
-Making sure that the G/S get to the population

Question 4

Opportunity cost/Reasons for Marginal Opportunity cost

Answer 4

Opportunity cost is the highest value alternative that must be forgone when a choice is made

The reason is because of specialization and adaptability

Question 5

Economic Capital

Answer 5

Consists of machines, factories, and etc…

Question 6

Financial Capital

Answer 6

Consists of bonds/stocks/cash

Question 7

Production possibility curve and Assumptions

Answer 7

PPC is an economic model which shows the various amounts of two goods that can be produced with full employment and fix technology
Assumptions:
1) All factors of production are held constant.
2) All resources are fully employed and efficiently used.
3) The existing technology is fixed.
4) Only two goods.

Question 8

Economic Growth
Key variable to it

Answer 8

It is the ability of the economy to produce more G/S
Technology

Question 9

Two-sector circular flow diagram

Answer 9

A model of the flow output and income from households to businesses and vice-versa