Multiple Choice
In the context of factors of production, what two requirements of supply must someone meet to be considered a producer?
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0. Basic Principles of Economics
Factors of Production
Multiple Choice
Which of the following statements about resources (factors of production) is true?
A
Resources are always abundant and can satisfy all human wants.
B
Resources do not play a role in determining the opportunity cost of production.
C
Resources only include land and labor, but not capital or entrepreneurship.
D
Resources are limited and must be allocated among competing uses.
Verified step by step guidance1
Understand the definition of resources (factors of production) in microeconomics: they include land, labor, capital, and entrepreneurship, which are inputs used to produce goods and services.
Recognize that resources are scarce, meaning they are limited in quantity and cannot satisfy all human wants simultaneously. This scarcity is a fundamental concept in economics.
Recall that because resources are scarce, choices must be made about how to allocate them efficiently among competing uses, which leads to the concept of opportunity cost.
Note that opportunity cost arises because using resources for one purpose means forgoing their use in another, so resources directly influence opportunity cost.
Evaluate each statement in the problem by comparing it to these economic principles to identify the true statement about resources.
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