Competency 2.1 - analyze how scarcity and opportunity cost influence choices about how to allocate resources

Question 1

scarcity

Answer 1

choices have to be made when either purchasing or producing goods and services because of this

Question 2

allocative efficiency / economic efficiency

Answer 2

a society achieves this if it produces the types and quantities of goods and services that most satisfy its people

Question 3

production efficiency / technical efficiency

Answer 3

a society achieved this when it is producing the grestest quanity of goods and services posssible from its resourced at a mininum cost, thus using fewer resources and increasing production quantities

Question 4

contributory standard (Standards of Equity)

Answer 4

people are entitled to a share of goods and services based on what they contribute to society; those making larger contributions will receive larger shares

Question 5

needs standard (Standards of Equity)

Answer 5

a person’s contribution to society is irrelevant as goods and services are distributed based on the needs of different households

Question 6

equality standards (Standards of Equity)

Answer 6

every person is entitled to an equal share of goods and services simply for existing

Question 7

full employment

Answer 7

an economy that uses all of its available resources, not just labor

Question 8

production possibilities frontier curve

Answer 8

a model of the economy used to illustrate the problems ssociated with scarcity, showing the maximum feasible combinations of two goods or services that society can produce, assuming all resources are used in their most productive manner

Question 9

technical efficiency

Answer 9

all points on the PPF curve; achieved when more of one good cannot be produced without producing less of the other good

Question 10

opportunity cost

Answer 10

the loss of potential gain from other options when one is chosen over the other

Question 11

law of increasing costs

Answer 11

as more of a good or service is produced, it’s opportunity cost will rise

Question 12

allocative efficiency

Answer 12

respresented on the PPF curve as the point that best satisfies society’s needs and wants; this point cannot be located without further information about society’s desires

Question 13

economic growth

Answer 13

requires that society increase the amount of resources it has or make those resources more productive through the application of technology; represented by an outward shift of the PPF curve