The difference between scarcity and a shortage is that A. shortages are a type of scarcity caused by natural disasters while scarcity is caused by human errors. B. scarcity is caused by poverty and shortages are caused by natural disasters. C. scarcity is always a part of human life while shortages usually are temporary. D. shortages are always part of human life while scarcity is usually temporary. Production refers to A. any activity that causes a material conversion of manufactured goods. B. any activity of a firm, whether a corporation, partnership, or sole proprietorship. C. any activity that results in the conversion of resources into goods and services that can be consumed. D. physically producing material goods only. Opportunity cost is A. the value of the next highest ranked alternative that must be sacrificed to obtain a want. B. the value of the opportunity selected when a need is satisfied. C. the intrinsic value of an economic good. D. the total value of all the alternatives given up when a choice is made. A bowed outward production possibilities curve occurs when A. additional units of output of one good necessitate greater reductions in the other good. B. opportunity costs are constant. C. there are surpluses in the goods being produced. D. resources are not scarce. Comparative advantage is the ability to A. perform an activity at a lower opportunity cost. B. determine who your best trading partners are. C. determine the best use of capital goods. D. convince others of the best choices to make in their own self-interest. Which of the following is an example of the law of demand? A. A decrease in the price of tea is followed by a decrease in tea purchases. B. An increase in the price of tea has no effect on the amount of tea purchased. C. A decrease in the price of tea is followed by an increase in tea purchases. D. The amount of tea purchased increases when the price is constant. Which of the following will cause the demand curve for bottled water to shift right if bottled water is a normal good? A. a fall in the price of bottled water B. a successful advertising campaign linking bottled water to lower cholesterol C. a decline in population D. a fall in average incomes of bottled water consumers Which of the following will NOT cause a shift in the demand for portable power banks? A. a change in income B. a change in taste C. a change in the price of portable power banks D. a change in the price of smartphones An inferior good is one for which A. the demand curve slopes up. B. demand increases as income increases. C. the demand curve is vertical. D. demand decreases as income increases