Questions and Answers
What is the study of how to manage money and the financial status of an individual, an enterprise, an organization, or a country called?
Economics
Which branch of economics deals with individuals, households, and specific companies?
What refers to the existence of limited resources that are not enough to address unlimited human needs or demands?
Scarcity
A shortage occurs when supply exceeds demand at a given time.
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What is the term for the loss from setting aside the value of pursuing other alternatives with the same amount?
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Free resources can be obtained and used without any costs.
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Match the following costs to their descriptions:
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What needs are essential for one’s survival?
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Diminishing marginal utility refers to the increased usefulness gained from consuming more of a product over time.
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Which of the following refers to goods that directly satisfy human needs/wants?
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What do we call goods that have a physical identity?
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What are resources that exist in nature, like land and water, called?
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Renewable resources can be regenerated and sustained over a long period of time.
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Study Notes
Economic Principles
- Economics studies financial management of individuals, businesses, organizations, and nations while addressing production questions: what, how, and for whom.
Branches of Economics
- Microeconomics focuses on individuals, households, and specific companies.
- Macroeconomics examines society as a whole and its global interactions.
Scarcity and Shortage
- Scarcity indicates limited resources insufficient to meet unlimited human demands.
- Shortage occurs when market demand exceeds available supply at a specific time.
Costs and Resource Evaluation
- Rationalization assesses the value of goods based on exchange costs.
- Opportunity Cost represents the loss from choosing one alternative over another.
- Free Resources are those available without cost, exceeding current needs.
Types of Costs
- Intrinsic Cost has no actual cash outlay.
- Extrinsic Cost involves identifiable monetary expenses.
Human Needs and Wants
- Unmet needs and wants can lead to feelings of inadequacy and distress, influenced by factors beyond economics.
- Primary Needs are essential for survival, whereas Secondary Needs enhance happiness and status.
Inputs in Production
- Fixed Inputs are limited in the short run, available until maximum output.
- Variable Inputs are used in longer production periods.
Utility and Its Principles
- Utility measures satisfaction gained from consuming goods or services.
- Diminishing Marginal Utility explains reduced satisfaction from continuous consumption of the same product.
- The Saturation Point is reached when utility is maximized.
- Diminishing Marginal Returns occurs when effort expended exceeds the benefit received from consumption.
Economic Activities
- Economic Activities encompass the production, distribution, and consumption of goods and services, facilitating the movement of these commodities.
Goods and Resources
- Tangible Goods are physical products, while Intangible Goods represent services.
- Economic Resources satisfy needs and wants, directly or indirectly.
- Consumption Goods directly meet human needs/wants, while Capital Goods support those needs indirectly.
Resource Sustainability
- Renewable Resources regenerate sustainably over time (e.g., watersheds, forests).
- Nonrenewable Resources are finite and exhaustible (e.g., coal, minerals).
- Natural Resources exist naturally in the environment (e.g., land and water).
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Description
This quiz focuses on the foundational concepts of economics, including the basic principles of microeconomics and macroeconomics. It aims to assess your understanding of how economic systems manage resources and respond to societal needs. Test your knowledge on essential economic principles and their applications.
