Economics Introduction Chapter 1

Questions and Answers

What is the primary subject of economics according to Alfred Marshall?

Study of political systems

Study of natural resources

Study of technological advancements

Study of man in the ordinary business of life (correct)

An employee is someone who provides goods and services to make a profit.

False

What term is used to describe activities that are undertaken for monetary gain?

Economic activities

When you buy goods to satisfy personal needs, you are known as a __________.

consumer Signup and view all the answers

Match the following roles in economics with their descriptions:

Consumer = Buys goods or services for personal use Producer = Sells goods to make a profit Employee = Works for someone else in exchange for wages Employer = Hires others and pays them wages Signup and view all the answers

What does scarcity in economics refer to?

A situation where wants exceed available resources Signup and view all the answers

If a person's income increases, they will always be able to fulfill all their wants.

False Signup and view all the answers

Why is the study of economics important?

It helps understand how to make choices with limited resources to satisfy wants. Signup and view all the answers

The resources available for production in agriculture have __________ uses.

alternative Signup and view all the answers

Match the following economic terms with their definitions:

Production = The process of creating goods and services Consumption = The use of goods and services by individuals Distribution = The way in which goods and services are allocated to consumers Scarcity = The limitation of resources to meet unlimited wants Signup and view all the answers

Study Notes

Introduction to Economics

Economics studies human behavior in everyday life, focusing on activities of consumption, production, and distribution.
Understanding of statistics is crucial for describing and analyzing these economic activities.

Why Economics?

Economics relates to concepts presented by Alfred Marshall, emphasizing the ordinary business of life.
Roles in the economy:
- Consumers: Individuals purchasing goods for personal needs or as gifts.
- Sellers: Individuals selling goods for profit, such as shopkeepers.
- Producers: Individuals or entities creating goods or services, like farmers or doctors.
- Employees: Individuals working for wages or salaries.
- Employers: Individuals providing jobs and wages to others.

Economic Activities

Economic activities aim for monetary gain.
Scarcity drives economic decisions – limited resources lead to choices in consumption and production.
Limited pocket money exemplifies the necessity to choose priorities in spending.

Scarcity

Scarcity is the core issue in economics, leading to various real-life challenges.
Examples of scarcity:
- Long queues for services.
- Crowded public transport.
- Shortages of essential goods.

Resources and Choices

Producers face limited resources with alternative uses, leading to a need for choice.
Resources used for food production could also serve non-food production (e.g., rubber, cotton).
The problem of choice arises from the limited availability of resources to satisfy competing wants.

Consumption, Production, and Distribution

Economics is structured around understanding human engagement in various economic activities.
Reliable data is essential to study production, consumption, and distribution effectively.

Description

This quiz covers the foundational concepts of economics as introduced in Chapter 1. It discusses the subject matter of economics, its connection with consumption, production, and distribution, and the role of statistics in analyzing these activities. Test your understanding of these key economic principles.