16 Questions
What is the meaning of the word ECONOMICS according to the text?
Management of the households
Who is considered the Father of Modern Economics?
Adam Smith
How has Economics been defined in the text?
Study of allocating resources to satisfy human wants
What is the title of the first book written by Adam Smith in Economics?
An inquiry into the Wealth of Nations
What does Economics deal with according to the text?
Allocation of scarce resources with alternative uses to produce and distribute goods/services
What is the social study that Economics is defined as?
Social study dealing with the allocation of scarce resources
What is the difference between positive economics and normative economics?
Positive economics is concerned with what is based on facts or theory, while normative economics is concerned with what ought to be based on value judgment or opinion.
What are the two main branches of economics?
Microeconomics and Macroeconomics
Define economic efficiency.
Economic efficiency is experienced when firms are able to reduce the per unit cost of producing the output and maximize the output at the lowest possible cost.
What is a model in economics?
A model refers to a tool used by economists to explain economic phenomena, using assumptions to simplify reality.
What are the two types of goods based on their availability and price?
Free goods (can be acquired at zero price) and Economic goods (scarce or limited and have a price)
What are the factors of production?
Land/natural resources, labor, capital, entrepreneurship
How do ordinary people apply economic theories in their day-to-day activities?
Ordinary people apply economic theories in making choices and decisions.
What is the difference between final goods and intermediate goods?
Final goods are ready for final consumption, while intermediate goods are used for further production into finished products.
How can studying economics benefit business?
Businesses can analyze the impact of economic phenomena on their operations and the economy as a whole.
What is a hypothesis in economics?
A hypothesis is a conjecture or proposition that is subjected to empirical verification.
Study Notes
Definition of Economics
- The word "Economics" comes from the Greek words "oikos" meaning house and "nomos" meaning custom or law.
- Economics is the social study of how individuals, businesses, governments, and nations allocate resources to meet their unlimited wants and needs.
Father of Modern Economics
- Adam Smith is considered the Father of Modern Economics.
Definition of Economics by Adam Smith
- Adam Smith defined economics as "an inquiry into the nature and causes of the wealth of nations."
Adam Smith's First Book
- The title of the first book written by Adam Smith in economics is "The Wealth of Nations".
Scope of Economics
- Economics deals with the production, distribution, and consumption of goods and services.
Branches of Economics
- The two main branches of economics are:
- Microeconomics: studies individual economic units, such as households, firms, and markets.
- Macroeconomics: studies the economy as a whole, including issues such as inflation, unemployment, and economic growth.
Economic Efficiency
- Economic efficiency occurs when resources are allocated in a way that maximizes the production of goods and services at the lowest possible cost.
Models in Economics
- A model in economics is a simplified representation of a complex economic system, used to analyze and predict economic behavior.
Types of Goods
- Goods can be classified into two types based on their availability and price:
- Free goods: available in unlimited quantities, such as air and water.
- Economic goods: scarce and have a price, such as food and clothing.
Factors of Production
- The factors of production are:
- Land: natural resources, such as land and water.
- Labor: human effort and skills.
- Capital: man-made goods, such as machinery and factories.
- Entrepreneurship: the ability to organize and manage production.
Applying Economic Theories
- Ordinary people apply economic theories in their day-to-day activities by making decisions about how to allocate their limited resources to meet their unlimited wants and needs.
Types of Goods
- Goods can be classified into two types:
- Final goods: goods that are consumed by the end user, such as food and clothing.
- Intermediate goods: goods that are used as inputs in the production of other goods, such as raw materials and machinery.
Benefits of Studying Economics for Business
- Studying economics can benefit business by providing insights into how to allocate resources efficiently, make informed decisions about production and pricing, and understand the impact of economic trends and policies on business operations.
Hypothesis in Economics
- A hypothesis in economics is a testable statement that predicts the relationship between two or more economic variables, used to analyze and understand economic phenomena.
Test your understanding of the nature of economics and its basic concepts in this introductory quiz for ECN101. Explore the origins of the term 'economics' and the contributions of Adam Smith, the Father of Modern Economics.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
