Name: ______________________________ Producing the Right Stuff Question Sheet 1) Although it is true that human beings face _________________ and can’t have everything they want, it’s also true that they have __________________________________________. 2) What are the two steps a society uses to determine exactly what to produce in order to maximize happiness? 1. 2. 3) Define Productive Efficiency: 4) Define Allocative Efficiency: 5) What two major factors affect production? 1. 2. 6) Economists traditionally divide inputs, or _________________________________, into three classes: 7) What is land in terms of economics? 8) What is labor in terms of economics? 9) What is capital in terms of economics? 10) What is human capital? 11) What human capital do you have as an individual currently? 12) ___________________________________ is probably the most important economic factor in determining exactly what to produce out of all the things that could possibly be produced, given the limited supply of resources. 13) Explain the low-hanging fruit principle (diminishing returns).