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Questions and Answers
Which formula correctly expresses Gross National Income (GNI)?
Which formula correctly expresses Gross National Income (GNI)?
What is the correct calculation for Gross Domestic Product (GDP) given the values provided?
What is the correct calculation for Gross Domestic Product (GDP) given the values provided?
Which statement correctly describes the concept of opportunity cost?
Which statement correctly describes the concept of opportunity cost?
Which of the following types of competition allows for easy entry and exit in the market?
Which of the following types of competition allows for easy entry and exit in the market?
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In a traditional economy, what primarily determines the production of goods?
In a traditional economy, what primarily determines the production of goods?
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Which statement accurately defines absolute scarcity?
Which statement accurately defines absolute scarcity?
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Which of the following is an example of imperfect competition?
Which of the following is an example of imperfect competition?
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Which component is excluded when calculating Gross National Income (GNI)?
Which component is excluded when calculating Gross National Income (GNI)?
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What does Gross National Income (GNI) include when calculating its total?
What does Gross National Income (GNI) include when calculating its total?
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Which formula correctly represents Gross Domestic Product (GDP)?
Which formula correctly represents Gross Domestic Product (GDP)?
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In demand and supply analysis, what does the equation Qd = 1000 - 25P represent?
In demand and supply analysis, what does the equation Qd = 1000 - 25P represent?
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What characterizes a monopoly in economic terms?
What characterizes a monopoly in economic terms?
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What defines absolute scarcity in economics?
What defines absolute scarcity in economics?
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The opportunity cost of selecting one course of action over another is defined as what?
The opportunity cost of selecting one course of action over another is defined as what?
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What is a key feature of monopolistic competition?
What is a key feature of monopolistic competition?
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Which statement accurately describes microeconomics?
Which statement accurately describes microeconomics?
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What does Gross National Income (GNI) include when calculating its total?
What does Gross National Income (GNI) include when calculating its total?
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Which of the following correctly describes the relationship between demand and supply?
Which of the following correctly describes the relationship between demand and supply?
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What is the main characteristic of a traditional economy?
What is the main characteristic of a traditional economy?
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Which statement is true regarding imperfect competition?
Which statement is true regarding imperfect competition?
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What defines monopoly in economic terms?
What defines monopoly in economic terms?
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What best characterizes the concept of scarcity in economics?
What best characterizes the concept of scarcity in economics?
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Which of the following statements accurately describes microeconomics?
Which of the following statements accurately describes microeconomics?
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What role does savings play in an economy?
What role does savings play in an economy?
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What does the term 'microeconomics' focus on?
What does the term 'microeconomics' focus on?
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Which of the following best describes 'opportunity cost'?
Which of the following best describes 'opportunity cost'?
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What characterizes a traditional economy?
What characterizes a traditional economy?
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What does GDP represent?
What does GDP represent?
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In the context of competition, what defines a monopoly?
In the context of competition, what defines a monopoly?
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What is 'absolute scarcity'?
What is 'absolute scarcity'?
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What role do savings play in economic terms?
What role do savings play in economic terms?
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What is the relationship between labor and capital in the production of goods?
What is the relationship between labor and capital in the production of goods?
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Study Notes
Applied Economics
- The use of scarce resources to satisfy unlimited wants.
Opportunity Cost
- The value of the best foregone alternative when making a choice.
Scarcity
- A condition where there are insufficient resources to satisfy all needs and wants of a population.
Capital
- A man-made resource used to produce goods and services.
Microeconomics
- Deals with the behavior of individual entities such as consumers, producers, and resource owners.
Market Economy
- Decisions on what goods to produce are made based on people's preferences.
Gross Domestic Product (GDP)
- The market value of all goods and services produced within a country, regardless of ownership, during a specific period of time.
Labor Supply/Labor Force
- The portion of the population, 15 years old and over, who are willing and able to work, including those actively seeking work but haven't found employment.
Perfect Competition
- Ideal situation with no market power, many buyers and sellers, homogeneous products, and easy entry/exit.
Tax
- Considered the 'lifeblood' of the government.
Monopolistic Competition
- Competition with differentiated products, easy entry and exit, and some control over price.
Pure Competition/Perfect Competition
- Large number of buyers and sellers, homogeneous products, and no barriers to entry/exit.
Gross National Income (GNI)
- Total income earned by a country's residents and businesses, regardless of location.
Demand and Supply Schedule
- Shows the relationship between price and quantity demanded and supplied.
Equilibrium Price and Quantity
- The point where the quantity demanded and supplied are equal, indicating a stable market.
Applied Economics
- Is a social science that utilizes scarce resources to meet unlimited wants.
Social Science
- The application of economic theory and econometrics in specific settings to analyze potential outcomes is called Applied Economics.
Scarcity
- Refers to the value of the best foregone alternative. This is also known as opportunity cost.
Absolute Scarcity
- Occurs when there are insufficient resources to satisfy all the needs and wants of a population.
Labour
- Labour is human effort directed toward the production of goods and services, including both manual and intellectual contributions. Capital refers to man-made resources used in production, such as machinery and equipment, or financial assets that are used to generate income.
Microeconomics
- Studies the behavior of individual entities in the economy, such as consumers, producers, and resource owners.
Traditional Economy
- Economic decisions, particularly about what goods to produce, are based on customs, traditions, and beliefs. Market economies are characterized by free markets, where prices are determined by supply and demand forces.
GNP and GDP
- GNP (Gross National Product) is the market value of all goods and services produced by a nation's residents within a specific period.
- GDP (Gross Domestic Product) is the market value of all goods and services produced within a country's borders within a specific period.
Daily Minimum Wage
- Five hundred pesos (P 500) is the daily minimum wage for individuals in the agriculture sector in Metro Manila.
Unemployment
- The portion of the population, 15 years old and over, who are willing and able to work but are unemployed is referred to as the labor force.
Imperfect Competition
- Occurs when there is no one ideal situation for buyers or sellers. Perfect competition is an ideal model where numerous, small buyers and sellers act independently, offering homogeneous products with easy entry and exit.
Savings & Taxes
- Taxes are the lifeblood of the government, funding essential services and functions. Savings are the foundation for individual and national economic prosperity, a primary source for investment, and key to long-term growth and stability.
Monopoly and Monopolistic Competition
- A monopoly is a market structure where a single firm controls the entire market for a particular product or service, with no close substitutes. Entry and exit are typically difficult.
- Monopolistic competition features numerous firms offering differentiated products, with some control over pricing. Entry and costs are easier than a monopoly.
Product Differentiation
- Agriculture products are examples of businesses operating in pure or perfect competition. This is characterized by many firms producing homogeneous products, with buyers and sellers acting independently.
Gross National Income (GNI)
- The total income earned by nationals of a country, regardless of where they earn it.
- To compute GNI, add the value of Agriculture (P 700,000), Services (P 2,900,000), Industry (P 1,500,000), and income earned by foreigners in the country (P 900,000). Then subtract income earned by nationals in the rest of the world (P 3,000).
- Total GNI is P 5,997,000.
Gross Domestic Product (GDP)
- The total value of all goods and services produced within a country's borders.
- To compute GDP, add Consumption (P 7,000,000), Investment (P 600,000), Exports (P 900,000), and Government spending (P 300,000). Subtract Imports (P 600,000).
- Total GDP is P 8,800,000.
Demand and Supply Schedule
- Qs = -200 + 50P (Supply equation, where Qs is quantity supplied and P is price)
- Qd = 1000 - 25P (Demand equation, where Qd is quantity demanded and P is price)
- When price (P) is 16, Qs is 600 and Qd is 600.
- When price (P) is 18, Qs is 700.
Equilibrium
- The point where quantity supplied (Qs) equals quantity demanded (Qd).
- In this case, both Qs and Qd are equal to 600 when P = 16.
- The equilibrium price is 16 and the equilibrium quantity is 600.
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Description
Test your understanding of key concepts in applied economics with this quiz. Explore important topics such as opportunity cost, scarcity, and market economy dynamics. Perfect for students looking to solidify their grasp on economic principles.
