Questions and Answers
When b is ______, it shows an inverse relation between X and Y.
negative
In the demand function Qd=90-5P, Qd stands for quantity ______.
demanded
The price is indicated on the ______ axis in an economics graph.
vertical
In the demand schedule, as the price increases, the quantity demanded ______.
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The locus of points in a graph depicts the relation between two ______.
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The demand schedule is a tabular presentation of quantity and its corresponding ______.
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The lower left-hand corner of a graph where the two axes meet is called the ______.
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In economics, the variable Q is drawn on the ______ axis.
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A graph represents the relationship between two variables by means of a ______.
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The demand function can be represented in a mathematical ______.
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Study Notes
Origin of Economics
- Derived from the Greek word "Oikonomia," meaning household management.
- Involves activities related to acquiring and managing wealth.
Definition of Economics
- Study of how humans organize consumption and production.
- Focuses on earning a living and improving societal welfare.
- A social science that examines production, exchange, distribution, and consumption of goods and services.
- Addresses efficient allocation of scarce resources to meet unlimited human wants.
Economics as a Science
- Systematized body of knowledge employing scientific methods.
- Follows a process: identify the problem, formulate hypotheses, evaluate resources, and address scarcity.
- Scarcity is fundamental, limiting choices and necessitating decisions on resource allocation.
Importance of Economics
- Known as the "Queen of the Social Sciences" due to its pivotal role in addressing human wants and needs.
- Enhances analytical skills crucial for future careers, particularly in business management.
- Informed decision-making benefits employees and consumers in financial investments and business operations.
- Understanding economics is essential for well-informed citizenship.
Macroeconomics vs. Microeconomics
- Macroeconomics: Studies the aggregate economy, focusing on large-scale economic factors (e.g., national income, unemployment rates).
- Microeconomics: Analyzes individual consumer and firm behavior, focusing on specific economic units and market dynamics (e.g., prices, employment within specific industries).
Economic Components Comparison
- Microeconomics: Examines production, pricing, income distribution, and employment within specific firms or sectors.
- Macroeconomics: Looks at overall economic production, general price levels, overall income levels, and national employment statistics.
Economic Methodology
- Utilizes descriptive economics to compile data related to economic issues from primary and secondary sources.
- Theoretical economics derives principles and theories from factual data.
- Economic policies are practical applications based on economic theories aiming to solve specific problems and achieve goals.
Positive vs. Normative Economics
- Positive Economics: Describes economic systems and policies without value judgments; can be tested with factual evidence.
- Normative Economics: Involves value judgments assessing economic performance; suggests prioritizing agriculture for national growth.
Demand Function Example
- A mathematical equation representing demand: Qd = 90 - 5P.
- Qd (Quantity Demanded) decreases as price (P) increases.
- Demand Schedule: A tabular representation showing price and corresponding quantity demanded.
Graphical Representation of Demand
- Graph plots the relationship between two variables: quantity (horizontal axis) and price (vertical axis).
- Origin is the intersection point of the axes, with Q on the x-axis and price on the y-axis, illustrating demand behavior visually.
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Description
This quiz covers the foundational aspects of economics including its origin, definitions, and the importance of distinguishing between microeconomics and macroeconomics. It helps students grasp the basic concepts that frame the study of economics and its methodologies.
