33 Questions
What is national income?
The sum of all individual incomes for a specific period
What are the three classifications of economic wants?
Necessities, comforts, and luxuries
What are economic wants?
Wants that require the use of land, labor, capital, and organization to generate income
What is the definition of market equilibrium?
Quantity demanded of a product is equal to the quantity supplied
What is the difference between capital goods and consumer goods?
Capital goods generate income, while consumer goods satisfy wants.
What is money income?
The reward paid in the form of money to the four factors of production.
What is utility?
The power of a good or service to satisfy a human want.
How are prices of goods and services determined in a market?
By the demand and supply of the market
Which of the following is used to determine the prices of goods and services?
Supply and demand
What is the definition of labor market equilibrium?
Units of labor demanded are equal to the units of labor supplied
At what output level is the equilibrium of a firm achieved?
The output level where marginal cost of the product is equal to its marginal revenue
What are the three types of capital goods?
Raw material, semi-manufactured goods, and fully manufactured goods
What is the difference between consumer goods and capital goods?
Consumer goods are used to produce more goods while capital goods directly satisfy human wants
When is satisfaction achieved?
After the utility of a product is used
What is real income?
The number of goods and services obtained by spending the money income
What factors affect utility?
Human wants, use, knowledge, time, and season.
How are general price level and real incomes of the people related?
They are negatively correlated
What are the three types of capital goods?
Raw material, semi-manufactured goods, and fully manufactured goods
What is price?
The value of a product measured in terms of money.
What is consumption?
The using up of utility of a product for the satisfaction of wants.
Are economic wants unlimited or limited?
Unlimited
Can economic wants be satisfied temporarily?
Yes
What is wealth?
Any good or service that has value in exchange
What is the difference between perishable and durable goods?
Perishable goods have a short utility period, while durable goods have a longer one
Are there any hard and fast rules to determine which goods fall under each category of economic wants?
No
What does individual wealth include?
Material and non-material goods owned by an individual.
What is aggregate consumption?
The part of national income spent on consumer goods and services.
What are savings?
The part of income not spent on consumer goods and services.
What does national wealth include?
Goods owned by a nation.
What is investment?
The use of savings to increase the capital assets in a country.
What is income?
The amount of money received after a specified period of time for personal services or services rendered by property.
What does total quantity refer to?
The total number of goods and services consumed or produced
What is income a reward for?
Labor, entrepreneurship, land, and capital.
Study Notes
- Economics is concerned with human wants and how they are satisfied through economic activities.
- Human wants can be economic or non-economic.
- Economic wants require the use of land, labor, capital, and organization to generate income.
- Economic wants can be classified as necessities, comforts, or luxuries.
- Economic wants are unlimited, not equally important, and rise again and again.
- Goods and services are used to satisfy human wants and their prices are determined by the market through demand and supply.
- Consumer goods directly satisfy human wants while capital goods are used to produce more goods and generate income.
- There are three types of capital goods: raw material, semi-manufactured goods, and fully manufactured goods.
- Economic wants can be satisfied temporarily.
- There are no hard and fast rules to determine which goods fall under each category of economic wants.
Test your knowledge of economics and learn about human wants, the use of land, labor, capital, and organization to generate income, and the classification of economic wants. Explore the differences between necessities, comforts, and luxuries, how goods and services are used to satisfy human wants, and how their prices are determined by the market through demand and supply. Discover the types of capital goods and the temporary satisfaction of economic wants. Take this quiz to expand your understanding of economics and its impact on our daily lives
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