Factors of production include all of the following

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4. Factors of production include all of the following EXCEPT: a. Labor b. Land c. Capital d. Human capital e. None of the above answers are correct because all of the above are factors of production 5. Which of the following statements is/are correct? I. The “alternative thing given up to get something else” is a good definition of opportunity cost II. Wealthy economies like the U.S. do not face tradeoffs III. Scarcity creates opportunity costs IV. None of our ten principles address opportunity cost 6. You have the choice of going to Disney World for the week, going skiing for the week, or working at your job for the week. The opportunity cost of going to Disney World is: 10
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7. Which of the following statements apply to economic models? I. An economic model makes assumptions II. An economic model is simpler than the reality it explains III. The production possibilities frontier is one example of an economic model 8. Which of the following is NOT illustrated by a PPF? a. Scarcity b. Who gets the goods produced c. Opportunity cost d. Necessity of making tradeoffs 9. A country that must decrease production of one good in order to increase the production of another 10. Suppose a country, when operating on its PPF, can produce 25 tons of corn and 60 tons of wheat OR 26 tons of corn and 55 tons of wheat. At that point on the PPF, the opportunity cost of 1 ton of corn is: 11
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