Economics Lecture 1: Introduction to Economics
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Questions and Answers

What is an essential characteristic of the stem in constructing a meaningful question?

  • It should present a definite problem. (correct)
  • It should negatively state the question.
  • It should contain irrelevant information.
  • It should be lengthy for clarity.

What should be avoided when constructing options for multiple choice questions?

  • Using common phrases from the content. (correct)
  • Including plausible distractors.
  • Creating mutually exclusive options.
  • Using all of the above options.

What should be ensured when selecting the correct answer in a multiple choice question?

  • It should confuse the students.
  • It should be less relevant than the distractors.
  • It must be mentioned in the content. (correct)
  • The answer may be a common student misconception.

How should distractors in a multiple choice question be characterized?

<p>They should represent common misconceptions. (B)</p> Signup and view all the answers

What is a common feature of options in a well-constructed multiple choice question?

<p>They are clear and concise. (A)</p> Signup and view all the answers

What happens to quantity demanded when price increases?

<p>Quantity demanded decreases (A)</p> Signup and view all the answers

Which factor does NOT affect the demand curve?

<p>Status of competitors (B)</p> Signup and view all the answers

What is a substitute good?

<p>A good that can be used in place of another one (B)</p> Signup and view all the answers

If a good is classified as a normal good, what happens when income increases?

<p>Demand increases (B)</p> Signup and view all the answers

A movement along the demand curve is caused by what?

<p>Change in price (A)</p> Signup and view all the answers

What is the primary focus of microeconomics?

<p>Behavior of individuals and firms in resource allocation (D)</p> Signup and view all the answers

Which of the following best defines scarcity in economics?

<p>The limitation of resources in relation to unlimited wants (A)</p> Signup and view all the answers

What aspect does macroeconomics primarily concern itself with?

<p>Economic growth and overall economic policies (D)</p> Signup and view all the answers

What does the study of economics primarily analyze?

<p>How societies use scarce resources for production and distribution (C)</p> Signup and view all the answers

Which of the following is NOT covered by macroeconomics?

<p>Individual pricing strategies (B)</p> Signup and view all the answers

What is the relationship described by the supply schedule/curve?

<p>The link between market price and quantity supplied (A)</p> Signup and view all the answers

Which of the following factors does NOT affect the supply curve?

<p>Seasonal demand changes (D)</p> Signup and view all the answers

What does a movement along the supply curve indicate?

<p>Change in price leading to different amounts supplied (D)</p> Signup and view all the answers

At what point do quantity demanded and quantity supplied equal each other?

<p>At market equilibrium (D)</p> Signup and view all the answers

What happens to the market when there is a surplus?

<p>Price tends to fall (A)</p> Signup and view all the answers

Flashcards

Economics

The study of how societies use limited resources to produce and distribute goods and services.

Scarcity

The basic economic problem: limited resources vs. unlimited wants.

Microeconomics

Study of individual economic agents and their decisions, prices, and production in markets.

Macroeconomics

Study of the entire economy, like national income, unemployment.

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Economic agents

Individuals or firms involved in economic activity.

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Opportunity Cost

The value of the next best alternative forgone when making a choice.

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Production Possibility Frontier

A curve representing all possible combinations of two goods that can be produced with available resources and technology.

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Supply and Demand

Interaction between buyers (demand) and sellers (supply) that determines price and quantity in a market.

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Economic Growth

Increase in the capacity of an economy to produce goods and services.

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Comparative Advantage

Ability of an entity to produce a good or service at a lower opportunity cost than another.

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Demand

The various quantities of a product people want at different prices, during a specific time.

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Quantity Demanded

The amount of a good or service consumers are willing and able to buy at a specific price.

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Law of Downward Sloping Demand

As price increases, the quantity demanded decreases, and vice versa, assuming other factors are constant.

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Movement Along Demand Curve

A change in quantity demanded caused by a change in price, while other factors remain constant.

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Substitute Good

A good that can be used in place of another good.

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Supply Curve

Relationship between a good's price and the quantity producers are willing to sell.

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Factors Affecting Supply

Technology, input prices, prices of related goods, government policy, influencing producer's output decision

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Movement Along Supply

Change in quantity supplied due to a change in price.

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Market Equilibrium

When quantity demanded equals quantity supplied; price has no pressure to change.

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Market Surplus

When quantity supplied exceeds quantity demanded.

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Study Notes

Economics - Lecture 1

  • Economics is the study of how societies use scarce resources to efficiently produce goods and services to be distributed among individuals.
  • It analyses the production, distribution, and consumption of goods and services, as well as the behaviours and interactions of economic agents.
  • A basic economic problem is the gap between limited resources and limitless wants.
  • Microeconomics studies the behaviour of individuals and firms, studying how they make decisions regarding resource allocation, pricing, and production in various markets.
  • Macroeconomics describes and explains economic processes that concern aggregates, such as national income, unemployment rates, inflation, economic growth, and broader issues like monetary policy.

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Description

This quiz covers the fundamental concepts of economics, including the study of resource allocation, production, and consumption. It differentiates between microeconomics and macroeconomics, examining the interactions of economic agents and broader economic issues. Test your understanding of these foundational theories and principles of economics.

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