FTCE Social Science 6-12: Economics
Exam Latest Update With Complete
Solutions
Economics CORRECT ANSWERS The social science that examines how people
choose to use limited or scarce resources to obtain maximum satisfaction of unlimited
wants.
Thee Main Components of Economics CORRECT ANSWERS 1. Economic Methods
2. Macroeconomics
3. Microeconomics
Macroeconomics CORRECT ANSWERS - the study of economics as a whole
- includes inflation, unemployment, and economic growth
Microeconomics CORRECT ANSWERS Study of the individual parts, like households,
business firms, and government agencies, that make up the economy and particularly
emphasized both how these units make decisions and the consequences of these
decisions.
Scarcity CORRECT ANSWERS - when resources are limited, the limitation affects
prices
- choices have to be made when either purchasing or producing goods
Three Crucial Decisions for Societies CORRECT ANSWERS 1. Which and how many
goods and services it should produce;
2. How it should produce these goods and services;
3. How the goods and services should be distributed among the people.
Two Components of Scarcity CORRECT ANSWERS 1. The good has to be limited AND
2. People have to want it.
Economic Growth CORRECT ANSWERS - one way to deal with scarcity
- produce more than the demand so you always have an abundant supply
- you would need more resources, better resources, and better technology
Improve the Use of Goods and Services CORRECT ANSWERS If society uses its
resources wisely, then scarcity is less likely to be an issue.
Reduce Wants CORRECT ANSWERS Get society to not want so much of the item.
Four E's CORRECT ANSWERS 1. Allocative Efficiency
2. Productive Efficiency
, 3. Full Employment
4. Equity
Allocative (Economic) Efficiency CORRECT ANSWERS - can achieve this if it produces
the types and quantities of goods and services that most satisfy its people
- using limited resources to produce the right mix of goods so that society makes more
of what people want and less of what people do not want
- failure to meet this wastes resources by over producing unwanted items
Productive Efficiency (Technical Efficiency) CORRECT ANSWERS - achieves this when
society is producing the greatest quantity of goods and services possible from its
resources at a minimum cost, thus using fewer resources and increasing production
quantities
- three methods:
1. not using more resources than necessary
2. using resources where they are best suited
3. using technology that minimize cost
Equity CORRECT ANSWERS - not necessarily synonymous with equality
- no objective standard - all societies use different measurements
Standards of Equity CORRECT ANSWERS Three widely held standards:
1. contributory standard
2. needs standard
3. equality standard
Contributory Standard CORRECT ANSWERS - people are entitled to a share of goods
and services based on their contribution (larger contribution, larger shares)
- issues: measurement of contribution and what to do about those who don't/can't
contribute (disabled, etc.)
Needs Standard CORRECT ANSWERS - individual contribution is irrelevant
- goods/services distributed based on needs
- issues: measuring need, convincing people to still contribute to society
Equality Standard CORRECT ANSWERS - everyone entitled to an equal share
because they are persons
- issues: how to allow for needs, how to induce individuals to maximize their productivity
Full Employment CORRECT ANSWERS - using all available resources, not just labor
- societies can produce more
Production Possibilities Frontier Curve CORRECT ANSWERS - model used to illustrate
the problems associated with scarcity
- shows maximum feasible combinations of two goods/services that society can produce
- assumptions:
Exam Latest Update With Complete
Solutions
Economics CORRECT ANSWERS The social science that examines how people
choose to use limited or scarce resources to obtain maximum satisfaction of unlimited
wants.
Thee Main Components of Economics CORRECT ANSWERS 1. Economic Methods
2. Macroeconomics
3. Microeconomics
Macroeconomics CORRECT ANSWERS - the study of economics as a whole
- includes inflation, unemployment, and economic growth
Microeconomics CORRECT ANSWERS Study of the individual parts, like households,
business firms, and government agencies, that make up the economy and particularly
emphasized both how these units make decisions and the consequences of these
decisions.
Scarcity CORRECT ANSWERS - when resources are limited, the limitation affects
prices
- choices have to be made when either purchasing or producing goods
Three Crucial Decisions for Societies CORRECT ANSWERS 1. Which and how many
goods and services it should produce;
2. How it should produce these goods and services;
3. How the goods and services should be distributed among the people.
Two Components of Scarcity CORRECT ANSWERS 1. The good has to be limited AND
2. People have to want it.
Economic Growth CORRECT ANSWERS - one way to deal with scarcity
- produce more than the demand so you always have an abundant supply
- you would need more resources, better resources, and better technology
Improve the Use of Goods and Services CORRECT ANSWERS If society uses its
resources wisely, then scarcity is less likely to be an issue.
Reduce Wants CORRECT ANSWERS Get society to not want so much of the item.
Four E's CORRECT ANSWERS 1. Allocative Efficiency
2. Productive Efficiency
, 3. Full Employment
4. Equity
Allocative (Economic) Efficiency CORRECT ANSWERS - can achieve this if it produces
the types and quantities of goods and services that most satisfy its people
- using limited resources to produce the right mix of goods so that society makes more
of what people want and less of what people do not want
- failure to meet this wastes resources by over producing unwanted items
Productive Efficiency (Technical Efficiency) CORRECT ANSWERS - achieves this when
society is producing the greatest quantity of goods and services possible from its
resources at a minimum cost, thus using fewer resources and increasing production
quantities
- three methods:
1. not using more resources than necessary
2. using resources where they are best suited
3. using technology that minimize cost
Equity CORRECT ANSWERS - not necessarily synonymous with equality
- no objective standard - all societies use different measurements
Standards of Equity CORRECT ANSWERS Three widely held standards:
1. contributory standard
2. needs standard
3. equality standard
Contributory Standard CORRECT ANSWERS - people are entitled to a share of goods
and services based on their contribution (larger contribution, larger shares)
- issues: measurement of contribution and what to do about those who don't/can't
contribute (disabled, etc.)
Needs Standard CORRECT ANSWERS - individual contribution is irrelevant
- goods/services distributed based on needs
- issues: measuring need, convincing people to still contribute to society
Equality Standard CORRECT ANSWERS - everyone entitled to an equal share
because they are persons
- issues: how to allow for needs, how to induce individuals to maximize their productivity
Full Employment CORRECT ANSWERS - using all available resources, not just labor
- societies can produce more
Production Possibilities Frontier Curve CORRECT ANSWERS - model used to illustrate
the problems associated with scarcity
- shows maximum feasible combinations of two goods/services that society can produce
- assumptions:
