Chapter 5 - All Section Reviews

Question 1

What is a society’s economic problem?

Answer 1

How to best accomplish its economic goals.

Question 2

How is unemployment a problem for society?

Answer 2

Unemployment is a waste of human labor and it’s usually accompanied by poverty, crime, and despair

Question 3

What is the difference between extensive growth and intensive growth of an economy?

Answer 3

• Extensive growth - The economy produces more goods and services by increasing its amount of land, labor, or capital.
• Intensive Growth - The economy does not increase the amount the factors of production but rather increases in efficiency

Question 4

What are the three critical questions that every society must answer as it seeks to meet its economic goals?

Answer 4

• What will be produced?
• How will it be produced?
• Who will receive what is produced?

Question 5

How is the consumer goods/capital goods tradeoff a matter of spending versus saving?

Answer 5

When people spend money for consumer goods rather than save it. Financial institutions do not have money available to loan to businesses and the inverse is true.

Question 6

What is the difference between a labor intensive business and a capital intensive business?

Answer 6

• Labor Intensive - Uses a high number of workers to produce its product.
• Capital Intensive - Places a greater emphasis on machinery and equipment to produce its products.

Question 7

What should be the standard that Christians use to answer the distribution question?

Answer 7

Scripture

Question 8

List the four economic goals of most societies and in your own words explain the economic importance of each.

Answer 8

• Low level of unemployment - Anyone should be employed who is willing to seek employment.
• Stable level of prices - Not having prices fluctuate in the market.
• Healthy rate of economic growth - Availability for more goods and services.
• Fair distributing of income - The opportunity to enjoy all goods and services available.

Question 9

Identify the three biblical principles that provide a basis for a Christian’s treatment of the poor.

Answer 9

• Christians love their neighbors and themselves
• They are to do good to all men
• Their works are to glorify their father in heaven

Question 10

What way does the Bible give for a person to generate his own personal income? Use Scripture to support this position.

Answer 10

• Work
  
  • Proverbs 10:4
  • Proverbs 12:27
  • Proverbs 22:29