1. Chapter 1 Study Guide Name__________________________________
Multiple Choice
1. What is capital?
2. Factors of Production
3. What is the purpose of a productionpossibilitiesfrontier/curve?
4. How do youdefine anefficienteconomy?
5. What doesthe lawof increasingcoststell us?
6. Why are all goodsand servicesscarce?
7. What is the opportunitycostof a decision?
8. A factory isan example of whichfactorof production?
9. What doesa PPF/PPCshowyou?
10. How doeconomistsdefine scarcity?
11. What is the opportunitycostof spending$30 on some DVDs?
12. Who isconsideredtobe an entrepreneur?
13. What can a decisionmakinggridshow you?
14. How doeconomistsdefine land(one of the fourfactorsof production)?
15. How isscarcity differentfromashortage?
16. What kindsof thingscan be consideredhumancapital?
17. What doesitmeanif an economyisunderutilizingitsresources?
18. What doesitmeanif a PPFmovesdownandto the left?
19. What can cause a PPFto shiftto the right?
20. On yourtestyou will needtobe able toanalyze a PPF/PPCgraph,sobe sure to familiarizeyourself
withthese graphs.
21. Look at illustrations(pictures)andbe able totell whichfactorof productionisbeingrepresented.
22. How are servicesdifferentfromgoods?

2. Matching
23. OpportunityCost
24. Scarcity
25. ProductionPossibilitiesCurve
26. Underutilization
27. Services
28. Goods
29. Labor
30. Efficiency
Essays/Short Answer
31. Identifythe capital inashortarticle.
32. Describe the difference betweenthe conceptof scarcityandthe conceptof shortage.
33. Explainhowthe introductionof physical capital,inthe formof a computer,couldbenefitafamily.
Are there alsosome waysin whicha computermightnotbenefitafamily?