Resources and Trade — Answer Key
Part A: Multiple Choice
Circle the best answer for each question.
1. If you choose to spend your allowance on a book instead of a toy, the toy is your —
A) Supply
B) Demand
C) Opportunity cost
D) Trade deficit
The correct answer is C) Opportunity cost. If you choose to spend your allowance on a book instead of a toy, the toy is your — — the answer is Opportunity cost.
2. Which is the best example of scarcity?
A) A store has plenty of bread on the shelves
B) A town runs out of clean water during a drought
C) A farmer plants extra crops this year
D) A family buys a new car
The correct answer is B) A town runs out of clean water during a drought. Which is the best example of scarcity — the answer is A town runs out of clean water during a drought.
3. Japan imports most of its oil. What does this tell us about Japan?
A) Japan does not use oil
B) Japan has large oil reserves
C) Japan lacks enough oil resources of its own
D) Japan only trades with one country
The correct answer is C) Japan lacks enough oil resources of its own. Japan imports most of its oil. What does this tell us about Japan — the answer is Japan lacks enough oil resources of its own.
4. A country that grows more coffee than its people can drink will likely —
A) Throw the extra coffee away
B) Export the extra coffee to other countries
C) Stop growing coffee entirely
D) Import more coffee from neighbors
The correct answer is B) Export the extra coffee to other countries. A country that grows more coffee than its people can drink will likely — — the answer is Export the extra coffee to other countries.
Part B: Fill in the Blank
Write the correct answer on each line.
1. The next best choice you give up when making a decision is called the opportunity cost.
Opportunity cost is what you give up when you choose one thing over another. For example, if you buy a book instead of a toy, the toy is your opportunity cost.
2. When a resource is scarce, its price usually goes up.
When something is scarce, more people want it than can get it, so sellers can charge more. High demand plus low supply drives the price up.
3. Countries often specialize in making goods they can produce most efficiently.
Specializing means focusing on what you do best. Countries specialize in goods they can make efficiently, then trade for everything else they need.
4. Diamonds and platinum are examples of nonrenewable natural resources.
Diamonds and platinum formed deep underground over millions of years and cannot be replaced once mined. That makes them nonrenewable, unlike trees or sunlight.
5. A trade deficit happens when a country buys more from other nations than it sells.
A trade deficit means a country spends more on imports than it earns from exports. "Deficit" means a shortage, so the country has a gap between what it buys and sells.