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Questions and Answers
What is the primary distinction between Positive Economics and Normative Economics?
What is the primary distinction between Positive Economics and Normative Economics?
What is outside the scope of Business Economics?
What is outside the scope of Business Economics?
Which of the following statements is incorrect about Business Economics?
Which of the following statements is incorrect about Business Economics?
Why are economic goods considered scarce resources?
Why are economic goods considered scarce resources?
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In a free market economy, the allocation of resources is determined by
In a free market economy, the allocation of resources is determined by
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What is the primary means of allocating resources in a capitalist economy?
What is the primary means of allocating resources in a capitalist economy?
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What is the primary focus of Business Economics?
What is the primary focus of Business Economics?
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What is the other name for Business Economics?
What is the other name for Business Economics?
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What is a major focus of economics, in addition to resource allocation?
What is a major focus of economics, in addition to resource allocation?
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What is a consequence of insufficient demand during periods of economic downturn?
What is a consequence of insufficient demand during periods of economic downturn?
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What is a benefit of studying economics?
What is a benefit of studying economics?
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What is a characteristic of most economic problems?
What is a characteristic of most economic problems?
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What do economic tools assist with?
What do economic tools assist with?
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What is an example of an economic issue?
What is an example of an economic issue?
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What is not a primary concern of economics?
What is not a primary concern of economics?
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What is a challenge in understanding economic issues?
What is a challenge in understanding economic issues?
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What are the two fundamental reasons that lead to the existence of economy?
What are the two fundamental reasons that lead to the existence of economy?
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What is the primary focus of Microeconomics?
What is the primary focus of Microeconomics?
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What is the primary focus of Macroeconomics?
What is the primary focus of Macroeconomics?
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What is the main objective of economics?
What is the main objective of economics?
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What is the primary characteristic of economic assumptions?
What is the primary characteristic of economic assumptions?
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What is the main difference between Microeconomics and Macroeconomics?
What is the main difference between Microeconomics and Macroeconomics?
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What is the main concern of Business Economics?
What is the main concern of Business Economics?
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What is the main approach of Business Economics?
What is the main approach of Business Economics?
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What is the primary goal of industries in the public sector?
What is the primary goal of industries in the public sector?
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What is a characteristic of a mixed economy?
What is a characteristic of a mixed economy?
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What is a benefit of the price mechanism in a mixed economy?
What is a benefit of the price mechanism in a mixed economy?
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What is a disadvantage of a mixed economy?
What is a disadvantage of a mixed economy?
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What is a benefit of government's legislative measures in a mixed economy?
What is a benefit of government's legislative measures in a mixed economy?
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What is a characteristic of a combined sector?
What is a characteristic of a combined sector?
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What is the primary factor that influences a society's decision on the technique of production to use?
What is the primary factor that influences a society's decision on the technique of production to use?
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What is the main reason a society cannot satisfy every want of all its people?
What is the main reason a society cannot satisfy every want of all its people?
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Why does a society need to make provision for economic growth?
Why does a society need to make provision for economic growth?
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What is the consequence of using all scarce resources for current consumption?
What is the consequence of using all scarce resources for current consumption?
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What is the primary goal of deciding 'for whom to produce'?
What is the primary goal of deciding 'for whom to produce'?
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Why does a society need to decide on the technique of production?
Why does a society need to decide on the technique of production?
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What is the purpose of making provision for future production?
What is the purpose of making provision for future production?
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What is the implication of not making provision for future production?
What is the implication of not making provision for future production?
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Study Notes
Positive and Normative Economics
- Positive Economics describes the facts of the economy.
- Normative Economics involves evaluating whether some of these facts are good or bad for the welfare of the people.
Business Economics
- Business Economics is also called Managerial Economics.
- It has a close connection with statistics.
- It is concerned with the allocation of resources and the processes by which the productive capacity of these resources is increased.
Economic Goods and Scarcity
- Economic goods are considered scarce resources because they do not exist in adequate quantity to satisfy the requirements of the society.
- Human wants are unlimited and the resources are scarce.
Economic Systems
- In a free market economy, the allocation of resources is determined by consumer preferences.
- A capitalist economy uses prices as the principal means of allocating resources.
- Mixed economy combines the advantages of capitalist and socialist economies.
Decision-Making in Economics
- A society has to decide what to produce, how to produce, for whom to produce, and what provision should be made for economic growth.
What to Produce?
- The choice of what to produce depends on the availability of different factors of production and their relative prices.
How to Produce?
- The choice of how to produce depends on the availability of different factors of production and their relative prices.
For Whom to Produce?
- A society has to decide on who should get how much of the total output of goods and services.
What Provision Should be Made for Economic Growth?
- A society has to decide how much saving and investment should be made for future progress.
Mixed Economy
- Mixed economy has merits such as economic freedom, price mechanism, consumers' sovereignty, and advantages of economic planning.
- It also has disadvantages such as substantial uncertainties.
- It combines the advantages of capitalist and socialist economies.
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Description
This quiz covers the basics of business economics, including the difference between positive and normative economics. Test your understanding of the nature and scope of business economics.
