Answers LVA-Economics SPRINGIntroduction to Economics

Resources and Scarcity Answers

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How does scarcity determine the economic value of an item?

by the amount of goods that are produced

by the capital required to build the factory

by the unlimited wants of the consumers

by the resources consumed in production

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Read the graph.Which power source has been least consumed?

wood

wind

biofuel

hydroelectric

Study the graph.In what time period did hydroelectric power usage reach its peak?

1970–1980

1980–1990

1990–2000

2000–2010

Which statement best describes the impact of scarcity?

People are able to meet most of their needs.

Consumers must pay higher prices for many items.

Governments must try to meet the wants of citizens.

Economies can work to provide more goods and services.

A basic concept in economics is that all resources are

scarce.

allocated.

valuable.

renewable.

[BLANK]

renewable

inexpensive

abundant

scarce

Cecilia has studied economics and knows about the value and investment potential of diamonds. The price of diamonds has recently decreased, and a new diamond mine has opened nearby. Cecilia decides to buy a diamond necklace while the prices are lower.How did Cecilia’s knowledge of economics help her make a savvy commodity purchase?

She knew that diamonds are popular and in high demand.

She knew that diamonds are a nonrenewable resource, making them scarce.

She knew that the cost of diamonds depends only on the demand.

She knew that the purchase of diamonds will satisfy wants and needs.

The chess club needs to raise money for tournament uniforms. Some members want to sell energy drinks at a football game to raise funds, but others want to organize a car wash in the school parking lot. Based on the concept of scarcity, which thought should drive members' decision-making process to determine how to fundraise?

Where will unsold energy drinks be stored?

Is there enough consumer demand for a car wash?

Will the concession stand be open during the big game?

Are there enough volunteers to work a car wash?

How would a manufacturer benefit by using fewer scarce resources?

The product would be less expensive to produce.

The product would better satisfy consumer needs.

The product would be popular and readily available.

The product would provide a more satisfactory profit.

Based on the lesson, how are individuals and economies similar?

They both must decide how to allocate resources.

They both must carefully categorize available resources.

They both must recognize the issues with nonrenewable resources.

They both must choose whether to use more renewable resources.

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