LESSON 2: SS1
WEEK 2
BASIC ECONOMIC PROBLEMS AND
GOALS OF THE SOCIETY
Every society strives to achieve so many economic
objectives in attempt to satisfy the unlimited wants of its members.
All economic systems are faced with myriads of
problems which basically arose from the scarce nature of productive resources.
However, they strive to set economic goals and work to achieve them.
ECONOMIC
GOALS OF THE SOCIETY
Every economic system strives to achieve
1.
Full employment of resources
2.
Equitable distribution of income
3.
Economic efficiency
4.
Economic security
5.
Price stability
6.
A steady economic growth.
ECONOMIC PROBLEMS OF THE SOCIETY
All economic systems are faced with the problems of
1.
SCARCITY: resources are limited in relation
to unlimited wants
2.
CHOICE: deciding what is good for a system is an
economic problem
3.
OPPORTUNITY COST : Also called real cost. Faced with which want
to sacrifice for another, an economic system may fare well or bad. Ex. Health
forgone for entertainment will lead to health epidemics.
4.
SCALE OF PREFERENCE: a system is faced with the
challenge of ranking needs that suits the society, from the most important to
the least
5.
WHAT TO PRODUCE: Every system is faced with the
problem of knowing which good to produce to satisfy their bulging economic
wants.
6.
HOW TO PRODUCE: Choosing which technique of
production to adopt is a basic problem
7.
FOR WHOM TO PRODUCE: This has to do with
distribution, there is difficulty in distributing goods and services to ensure
equitable income
8.
EFFICIENT USE OF RESOURCES: Every system is
faced with how to ensure to ensure effective and efficient utilization of
productive resources.
FACTORS THAT DETERMINE WHAT, HOW AND FOR WHOM TO PRODUCE
1.
The type
of economic system operating in that system: There are 3 economic systems:
capitalism or free market, socialism or centrally planned and mixed economies.
Each has completely different modes of operation.
2.
Demand
level
3.
Income level
4.
Cost of production
5.
Level of technology
6.
Availability of resources
TEST
2 THEORY 10MARKS
1.
Economic problems arise because a country's
resources are limited in relation to her unlimited wants. Identify and explain
these economic problems. (1989 Q3)
2. (a)
Why is scarcity a fundamental problem in economics?
(b) Give a reason why Economics is a (i) science (ii) social science
(c) How does government solve the problem of scarcity?
(2009Q3)
A. What goods and
services to produce.
B. For whom to
produce goods or services.
C. What technique of production to adopted.
D. Equal
distribution of the goods and services.
E. How to ensure
that economy grow over time.
2. The decision on what to produce is a problem
in
A.
All economic systems
B.
Capitalist system
C.
Socialist system.
D.
Mixed system
3. One ways of solving the problem of
scarcity that faces individuals is for A.
The government to import goods massively so citizens can gets all they want. B. Them to work
very hard so that they are able to
buy all their wants C. them to choose between alternatives since they cannot meet all their
wants. D. The government to study peoples’
behavior in order to know their wants. E. Them to use their resources the way they want
4. Every Society strives to pursue all the
following economic objectives except...
A. Increased production. B. Price stability. C. An inequitable distribution of income. D.
Sustainable growth and development.
5. Human wants are unlimited because A.
Production is inadequate. B. Resources
have alternative uses. C. New wants always arise. D. Resources are limited.
6. Economic problems arise mainly as a
result of A. Inadequate statistical data
in West Africa . B. Excessive wastage of
available resources. C.
Lack of foresight on the part of resources users. D. Limitations in the availability of resources.
7. Economic problems arise because A.
Resources are scarce relative to wants.
B. Man is insatiable. C. Money is scarce. D. Man engages in too many economic activities.
8. The problem of scarcity is reduced by A.
Controlling consumption of goods an
services. B. Producing everything needed by consumers. C. Ensuring efficient allocation of resources. D.
Restricting consumer choices and
tastes.
9. Economic activities are undertaken to
solve the problem of
A.
Consumption. B. Opportunity cost. C. Production D. Scarcity
10. The 150.00 Naira which Olu would have
used to purchase a textbook was used to
buy a T-shirt. This implies that A. Olu B. Olu C.
Olu's opportunity cost is the textbook.
D. Olu's money cost is also the real
cost.
11. Most of the problems of economies arise
as a result of.....
A. Competing demand for scarce resources. B. Increase in demand for goods
and services. C. The desire of producers to supply more goods and services. D. The need to reduce the level of
poverty.
12. Which of the following problems arises
where there are more than one technically
possible methods of production? A. Where to produce. B. For whom to produce. C. How to produce. D. What to
produce.
14.
Which of these is related to resource allocation in an economy? A. How to produce. B. What to produce. C. For
whom to produce. D. Efficient
use of inputs.
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