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Questions and Answers
How is economics defined in the context provided?
How is economics defined in the context provided?
Which branch of economics focuses on individual economic participants?
Which branch of economics focuses on individual economic participants?
What is the main focus of macroeconomics?
What is the main focus of macroeconomics?
Which of the following concepts refers to a situation with limited supply?
Which of the following concepts refers to a situation with limited supply?
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What is the reward for labor in an economic context?
What is the reward for labor in an economic context?
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Which of these is NOT a focus of microeconomics?
Which of these is NOT a focus of microeconomics?
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Economic resources are considered limited because:
Economic resources are considered limited because:
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What type of economic concept focuses on the relationship between supply and demand?
What type of economic concept focuses on the relationship between supply and demand?
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What does scarcity imply for producers?
What does scarcity imply for producers?
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What is opportunity cost?
What is opportunity cost?
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What factor primarily affects how much goods are produced in an economy?
What factor primarily affects how much goods are produced in an economy?
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In the example of Company A, why does it have to choose between biscuits and mineral water?
In the example of Company A, why does it have to choose between biscuits and mineral water?
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Which of the following best describes the role of an entrepreneur?
Which of the following best describes the role of an entrepreneur?
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How does the method of production affect the economic outcome?
How does the method of production affect the economic outcome?
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What is one of the basic economic problems?
What is one of the basic economic problems?
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Why must consumers consider opportunity cost in their decisions?
Why must consumers consider opportunity cost in their decisions?
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Study Notes
Introduction to Economics (Ebook Chapters 1 & 2)
- Economics is the study of how people use limited resources to fulfil unlimited wants and needs
- Economists study the choices made and the consequences
- Economics is divided into two branches: microeconomics, and macroeconomics
Learning Outcomes
- Define economics
- Differentiate between microeconomics and macroeconomics
- Explain basic economic concepts
- Describe basic economic problems
Section 1: Defining Economics and Differentiating Microeconomics and Macroeconomics
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Definition of Economics
- Studies how people use limited resources to fulfil unlimited wants and needs
- Focuses on the choices people make and the results of those choices
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Microeconomics (p19)
- Focuses on individual participants in the economy (consumers, households, businesses, managers, investors)
- Examines prices and output in specific markets
- Looks at relationships between markets
- Examples: household income, individual prices, production of particular products
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Macroeconomics (p19)
- Considers the overall performance of the economy
- Examines the economy as a whole
- Studies aggregate economic activity
- Examples: national income, general price level, national/total output
Section 2: Basic Economic Concepts
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Scarcity (p17)
- Lack or shortness of supply
- Human wants exceed available resources
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Resources
- Limited resources - impossible to satisfy our unlimited wants
- Wants always exceeding limited resources
- Factors of Production - Land: Inputs into production provided by nature (raw materials, minerals, forests, etc) Reward: Rent - Labor: All forms of human input (physical and mental) into production Reward: Wage - Capital: Inputs into production previously produced (machinery, factories, tools) Reward: Interest - Entrepreneur: Combines resources for production Reward: profit
Section 3: Basic Economic Problems
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What to produce?
- Society decides the goods/services to produce considering resources
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How to produce?
- Choosing the most cost-effective production methods
- Labor-intensive or capital-intensive
- Minimum cost of production
- Choosing the most cost-effective production methods
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How much to produce?
- Produce based on demand using scarce resources
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For whom to produce?
- Distribution of goods & services based on factors, like income level
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Opportunity Cost (p17)
- What is given up to produce something else
- Value of the next best alternative that wasn't chosen
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Description
This quiz explores the fundamental concepts of economics, including definitions and the differentiation between microeconomics and macroeconomics. It covers key economic problems and how individuals and businesses make decisions using limited resources. Test your understanding of these foundational topics.
