Economic Development Concepts
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Questions and Answers

What does economics primarily study?

  • The distribution of wealth among different societies
  • The management of household chores
  • How society allocates its scarce resources (correct)
  • Government policies on resource management

    • Which term describes the limited availability of a commodity in demand?

  • Scarcity (correct)
  • Surplus
  • Oversupply
  • Abundance

    • What do physiological needs primarily relate to?

  • Economic resources availability
  • Basic bodily functions (correct)
  • Social acceptance and belonging
  • Self-esteem and recognition

    • What is one of Adam Smith's contributions to economics?

    <p>The Invisible Hand Theory</p> Signup and view all the answers

    Which of the following is NOT mentioned as a factor contributing to social needs?

    <p>Economic stability</p> Signup and view all the answers

    What are 'needs' in terms of human wants?

    <p>Physiological requirements for survival</p> Signup and view all the answers

    What characterizes esteem needs in the hierarchy of needs?

    <p>Recognition and self-confidence</p> Signup and view all the answers

    What does the concept of 'unlimited human wants' imply?

    <p>People are always seeking more goods and services</p> Signup and view all the answers

    Which aspect is included in the definition of wants?

    <p>Desired but not essential for survival</p> Signup and view all the answers

    Which of the following is NOT part of the hierarchy of needs?

    <p>Technological needs</p> Signup and view all the answers

    Which of the following is a factor of production?

    <p>Natural resources</p> Signup and view all the answers

    Labor in economic terms refers to what?

    <p>Mental and physical capacity of workers</p> Signup and view all the answers

    What are economic resources often referred to as?

    <p>Factors of production</p> Signup and view all the answers

    Which best describes capital in the context of factors of production?

    <p>Man-made goods used to produce other goods</p> Signup and view all the answers

    The Greek word 'Oikos' in economics refers to what?

    <p>Household</p> Signup and view all the answers

    Social needs include which of the following aspects?

    <p>Acceptance and belonging</p> Signup and view all the answers

    What does entrepreneurship primarily involve?

    <p>Creating or extracting value through business activities</p> Signup and view all the answers

    Which of the following best defines the problem of scarcity?

    <p>The imbalance between human wants and available resources.</p> Signup and view all the answers

    Which economic question addresses the allocation of production priorities?

    <p>What will be produced?</p> Signup and view all the answers

    Which type of business activity involves reselling products to consumers?

    <p>Merchandising businesses</p> Signup and view all the answers

    What is the focus of microeconomics?

    <p>Understanding decision-making at the individual or firm level</p> Signup and view all the answers

    Why is understanding consumer behavior essential for businesses?

    <p>Consumer consumption drives demand and job creation.</p> Signup and view all the answers

    What are the skills necessary for an entrepreneur mentioned in the content?

    <p>Vision, skills, and risk-taking abilities</p> Signup and view all the answers

    What is the primary role of manufacturing in business activities?

    <p>To create new products from raw materials or components</p> Signup and view all the answers

    What does the concept of sustenance in economic development primarily refer to?

    <p>Providing basic needs like food and shelter</p> Signup and view all the answers

    Which of the following best describes normative economics?

    <p>It evaluates economic outcomes and suggests courses of action.</p> Signup and view all the answers

    What are the three core values that define economic development?

    <p>Sustenance, Self-esteem, Freedom</p> Signup and view all the answers

    What is one characteristic of a good economic theory?

    <p>It should be simple enough to be understood yet complex enough to explain key features.</p> Signup and view all the answers

    Which aspect of economics focuses on what exists and how things work?

    <p>Positive Economics</p> Signup and view all the answers

    What distinguishes a model from a theory in economics?

    <p>Models represent empirical relationships, while theories provide explanations.</p> Signup and view all the answers

    Which of the following values associated with economic development emphasizes personal dignity and recognition?

    <p>Self-esteem</p> Signup and view all the answers

    What does freedom refer to in the context of economic development?

    <p>Maximizing choices and minimizing limitations.</p> Signup and view all the answers

    What is a key characteristic of a Market Economic System?

    <p>Economic resources are owned by private entities.</p> Signup and view all the answers

    Which of the following best describes a Command Economic System?

    <p>All resources are owned and controlled by the government.</p> Signup and view all the answers

    What is the primary consideration in a Mixed Economic System?

    <p>Both government and private entities interact to address economic questions.</p> Signup and view all the answers

    What does Opportunity Cost refer to in economic terms?

    <p>The value of the next best alternative that is forgone.</p> Signup and view all the answers

    What is the purpose of Economic Development?

    <p>Creating wealth that benefits the entire community.</p> Signup and view all the answers

    How are goods distributed in a Market Economic System?

    <p>To those who can afford to buy them.</p> Signup and view all the answers

    Which of the following is NOT a feature of a Command Economic System?

    <p>Market-driven price adjustments.</p> Signup and view all the answers

    What is a Trade-off in economic terms?

    <p>The satisfaction from a chosen option versus unmet needs.</p> Signup and view all the answers

    Study Notes

    Economic Development

    • Economic development is the sustained improvement of societal quality of life, emphasizing sustenance, self-esteem, and freedom.
    • Sustenance involves fulfilling basic needs like food, shelter, healthcare, and security.
    • Self-esteem relates to individual dignity, pride, and social acknowledgment.
    • Freedom encompasses a range of choices and minimizes external restrictions, including political liberties and economic opportunities.

    Aspects of Economics Study

    • Positive Economics examines factual states and causal relationships in economic behavior, focusing on "what is."
    • Normative Economics evaluates outcomes and makes value judgments, internalizing fairness and desired economic policies.

    Theories and Models

    • A good economic theory should balance simplicity and complexity, providing clear explanations for phenomena.
    • Models apply these theories practically, demonstrating relationships between variables through graphs, diagrams, or formulas.

    Definitions of Economics

    • Economics is the study of resource allocation to satisfy unlimited human wants amidst scarcity, originating from the Greek terms 'Oikos' (household) and 'Nomous' (management).
    • It is often referred to as the science of scarcity, aiming to explain economic behaviors related to resource exchange.

    Key Concepts

    • Scarcity occurs when human wants outweigh available resources, necessitating choices in resource allocation.
    • Unlimited human wants drive the economy, making satisfaction a continuous challenge.

    Hierarchy of Needs

    • Physiological Needs: Basic life necessities (air, water, food).
    • Safety Needs: Protection from danger and threats.
    • Social Needs: Acceptance, belonging, love, and friendship.
    • Esteem Needs: Self-confidence, recognition, and respect.
    • Self-actualization: Realizing personal potential and fulfillment.

    Factors of Production

    • Land: All natural resources without human intervention, including air, forests, and minerals.
    • Labor: Human effort, both physical and mental, to produce goods and services.
    • Capital: Man-made goods used in production processes.
    • Entrepreneurship: The ability to create and exploit business opportunities, involving skills, vision, and risk-taking.

    Economic Questions

    • What will be produced? Prioritization of crucial goods.
    • How will it be produced? Decision on production techniques based on available resources.
    • For whom will it be produced? Allocation based on purchasing capacity of the population.

    Types of Business Activities

    • Manufacturing: Creation of new products from raw materials.
    • Merchandising: Buying products to resell to consumers.
    • Service Companies: Offering services rather than physical products.

    Branches of Economics

    • Microeconomics: Focuses on individual or company decision-making.
    • Macroeconomics: Examines the economy as a whole, analyzing aggregate outcomes.

    Economic Systems

    • Market Economy: Private entities own resources and answer economic questions based on profitability and consumer capacity.
    • Command Economy: Government owns resources, decides on production to promote public welfare, and employs available labor.
    • Mixed Economy: Combines government and private sector decisions for mutual benefit.

    Opportunity Cost and Trade-offs

    • Opportunity cost is the loss of potential gain from choosing one alternative over another.
    • Trade-offs result in either satisfaction of needs or failure to meet them, exemplified by choices in consumer products.

    Conclusion on Economic Development

    • Economic development enhances community wealth, providing broader benefits such as job creation, economic growth, and improved quality of life for residents.

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    Description

    Test your knowledge on the fundamental aspects of economic development, including the importance of sustenance, self-esteem, and freedom in societal improvement. Explore the differences between positive and normative economics, and understand the role of theories and models in economic analysis.

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