Introduction to Economics

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Questions and Answers

What does the phrase 'thinking at the margin' imply in economic decision-making?

Considering the total cost only before making a decision.
Evaluating choices based solely on past experiences.
Focusing on the additional benefits or costs associated with a choice. (correct)
Ignoring opportunity costs in favor of immediate rewards.

Which of the following concepts is crucial for understanding the value of choices in economics?

Statistical analysis
Scarcity
Consumer surplus
Marginal thinking (correct)

According to the pie chart, how much time do people spend on hobbies and entertainment?

15%
30% (correct)
20%
25%

In the context of rational decision-making, what role does the concept of opportunity cost play?

It is the cost of the next best alternative foregone when a choice is made. (D) Signup and view all the answers

What percentage of their lives do people typically spend developing skills and talents according to the pie chart?

20% (A) Signup and view all the answers

What defines 'Kapdal' in the context of production?

Human-made tools and machinery that enhance production quality. (A) Signup and view all the answers

Which of the following best describes 'STUHAN'?

Items that provide satisfaction or fulfillment to basic human needs. (A) Signup and view all the answers

What is the primary issue described by 'KAKAPUSAN'?

Economic issues stemming from unlimited human wants and limited resources. (C) Signup and view all the answers

How does 'Kapdal' contribute to the production process?

By making tools and machinery available to enhance productivity. (C) Signup and view all the answers

Which statement is not true regarding 'KAKAPUSAN'?

It is unrelated to the availability of natural resources. (C) Signup and view all the answers

What does the term 'economics' primarily focus on?

Managing society's resources in relation to human desires (D) Signup and view all the answers

What is the primary difference between renewable and non-renewable resources?

Renewable resources can be replenished quickly; non-renewable resources cannot (C) Signup and view all the answers

Which of the following best explains 'unlimited wants' in the context of economics?

People's desires are never-ending, regardless of resource limits (C) Signup and view all the answers

Which of the following correctly identifies the origin of the word 'economics'?

Greek words meaning household and management (B) Signup and view all the answers

How do social sciences relate to the study of economics?

They provide insights into human behavior and societal needs (D) Signup and view all the answers

What does the term 'trade-off' refer to in economics?

The sacrifice of one option in favor of another. (A) Signup and view all the answers

What does opportunity cost represent?

The value of the best alternative forgone in a decision. (A) Signup and view all the answers

Which of the following best describes an incentive?

A motivating factor that encourages consumption of goods and services. (C) Signup and view all the answers

What is marginal thinking primarily concerned with?

The additional benefit gained from choosing one more unit of a product or service. (A) Signup and view all the answers

In the context of decision-making, what is a common example of opportunity cost?

The time spent watching television instead of studying. (D) Signup and view all the answers

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Study Notes

Economics

Branch of Social Science focused on addressing unlimited human needs and wants with limited resources.
Derives from Greek words "oikos" (house) and "nomos" (management).

Investigates society and human behavior scientifically.

Key Concepts

Unlimited Wants: Human needs and desires have no limit.
Limited Resources: Resources available to satisfy wants are finite.
Renewable Resources: Quick-replenishing resources like land and raw materials.
Non-Renewable Resources: Resources that are quickly exhausted, not easily replenished.

Kapdal

Refers to human-made resources that enhance product quality and productivity (e.g., machinery, materials).

STUHAN

Represents desires leading to essential needs fulfillment, contributing to human satisfaction beyond basic needs like food, clothing, shelter, and medicine.

KAKAPUSAN

Economic issue regarding the perpetual need against limited natural resources.

Important Economic Concepts

Trade-off: Choosing one item over another, sacrificing one for another (e.g., studying vs. playing).
Opportunity Cost: Value of the foregone best alternative when making decisions (e.g., walking to school vs. taking a jeep).

Incentives

Motivating factors or experiences influencing choices regarding goods or services (e.g., receiving a cellphone for good grades).
Companies often use promotions like buy-one-get-one offers.

Marginal Thinking

Evaluating additional benefits or costs associated with each choice.
Essential for rational decision-making.

Rational People Think at the Margin

Involves considering extra benefits or costs in decision-making processes.

Tradeoffs

Concepts of trade-offs, opportunity cost, incentives, and marginal thinking aid in informed decision-making.
Understanding values of choices relative to their costs fosters rational decisions across life areas.

Time Allocation

Pie chart illustrates time spent on various activities:
- Hobbies and entertainment: 30%
- Skill and talent development: 20%
- Rest: 15%
- Helping relatives: 25%