NAME: _______________________________ PERIOD: _____ DATE: _______ POINTS: ________

1. Explain the relationship between choices and scarcity as illustrated in the figure.

2. Using the information in this diagram, explain the consumer role in the circular flow of economics.

3. According to this diagram, who participates in the product market?

4. What conditions would have to change if Alpha wanted to produce more than 80 units of cars or 500 units of clothing?

5. According to this production possibilities curve, if the country Alpha chose to produce 40 units of cars, how many units of clothing could it produce?

Directions: Use your textbook and notes to help you answer the questions below.

6. How does division of labor improve productivity?

7. Societies are faced with which three basic questions about production of goods?

8. What is a nondurable good? Give an example

9. What is a capital good? Give an example

10. What are two factors that determines something’s value?

11. Define Entrepreneur.

12. Define economic models.

13. How can economic growth be achieved?

14. What is the difference between a product market and a factor market?

15. What is the most comprehensive measure of a nation’s wealth?

16. What is the purpose of the production possibilities curve?