Introduction to Economics: Basics and Market Concepts

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12 Questions

What is the significance of the term 'Economics' origin?

It refers to the study of household management.

What role do prices play in a market?

Prices guide decisions on what and how much to buy and sell.

What concept did Adam Smith use to explain how self-interest can benefit society as a whole?

Invisible Balance

How did Adam Smith describe the role of individuals in promoting societal interests?

By promoting their own self-interest

Which of the following is NOT an important component of Economics as mentioned in the text?

Price Stability

What is the primary focus of Economics as described in the text?

To fulfill unlimited human wants with limited resources.

What does the spillover principle suggest?

The impacts of decisions extend to those not involved in making them.

How does the Principle of Diminishing Returns affect output?

Output increases at a decreasing rate as one input increases.

What is the significance of the marginal principle in decision-making?

It helps in perfectly balancing marginal benefit and marginal cost.

How does the principle of opportunity cost relate to decision-making?

It highlights the trade-offs involved when making choices.

What is the difference between nominal value and real value, as per the text?

Real value measures money's worth in terms of goods it can buy.

What does the spillover benefit refer to, based on the text?

Benefits that extend to society members not part of a decision.

Explore the fundamental concepts of economics including scarcity, unlimited wants, making choices, and the basics of market arrangements. Learn about the origins of economics and its importance in understanding resource allocation.

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