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Questions and Answers
What aspect do both economics and political science primarily focus on?
What aspect do both economics and political science primarily focus on?
Which of the following topics would a political scientist most likely study?
Which of the following topics would a political scientist most likely study?
How do economists evaluate the impact of government actions?
How do economists evaluate the impact of government actions?
What is a primary concern of political scientists in relation to economic decisions?
What is a primary concern of political scientists in relation to economic decisions?
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What relationship exists between economics and political science?
What relationship exists between economics and political science?
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What is the primary focus of economics?
What is the primary focus of economics?
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Which of the following best describes the components of economics?
Which of the following best describes the components of economics?
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In economics, scarcity refers to:
In economics, scarcity refers to:
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Economics is classified as which type of science?
Economics is classified as which type of science?
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Which process does economics NOT typically examine?
Which process does economics NOT typically examine?
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What does macroeconomics primarily study?
What does macroeconomics primarily study?
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From which language does the word 'economics' originate?
From which language does the word 'economics' originate?
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Which of the following concepts is NOT primarily studied in macroeconomics?
Which of the following concepts is NOT primarily studied in macroeconomics?
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What is the meaning of the Greek word 'oikonomia'?
What is the meaning of the Greek word 'oikonomia'?
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Which of the following is an example of a macroeconomic study?
Which of the following is an example of a macroeconomic study?
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What method is used to make predictions about the price changes of a good?
What method is used to make predictions about the price changes of a good?
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Which scenario could affect the price of a good according to the concept discussed?
Which scenario could affect the price of a good according to the concept discussed?
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Under what condition might the price of a good decrease?
Under what condition might the price of a good decrease?
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What prediction can be made if the supply of a good decreases?
What prediction can be made if the supply of a good decreases?
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What is the main purpose of using deductive reasoning in this context?
What is the main purpose of using deductive reasoning in this context?
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Which economic principle addresses how resources are allocated in society?
Which economic principle addresses how resources are allocated in society?
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What does 'opportunity cost' refer to in economic decision making?
What does 'opportunity cost' refer to in economic decision making?
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Which term best describes a situation where quantity supplied exceeds quantity demanded?
Which term best describes a situation where quantity supplied exceeds quantity demanded?
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What is meant by 'market equilibrium'?
What is meant by 'market equilibrium'?
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Which of the following factors does NOT typically affect supply?
Which of the following factors does NOT typically affect supply?
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How do economists utilize mathematics in their work?
How do economists utilize mathematics in their work?
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What aspect of mathematics is particularly utilized by economists?
What aspect of mathematics is particularly utilized by economists?
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In which area do mathematicians apply economic concepts?
In which area do mathematicians apply economic concepts?
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What is the main relationship between economics and mathematics?
What is the main relationship between economics and mathematics?
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Which statement accurately reflects the intersection of economics and mathematics?
Which statement accurately reflects the intersection of economics and mathematics?
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Study Notes
Introduction to Economics
- Economics is the study of choices made by individuals, businesses, governments, and societies when faced with scarcity.
- Scarcity is the fundamental economic problem—there aren't enough resources to fulfill all wants and needs.
- Adam Smith (1723-1790) defined economics as the science of wealth, noting the "invisible hand" guiding individual self-interest to societal benefit.
- Economics is divided into microeconomics (individual behaviour) and macroeconomics (overall economy).
Origin of the Word Economics
- The word "economics" comes from the Greek word "oikonomia," meaning "household management."
- The term's meaning evolved over time to encompass the study of production, distribution, and consumption.
Is Economics a Science or an Art?
- Economics is categorized as a science due to its systematic collection, classification, and analysis of economic facts and data to establish relationships.
- It is also categorized as an art due to the practical application of guidance to solve economic problems and practical implementation.
- Both aspects (science and art) are complementary and essential.
Scope and Methodology in Economics
- Scope: Economics encompasses a wide range of topics, including development economics, industrial economics, transport economics, welfare economics, environmental economics, and digital economics.
- Methodology: Economic methodology includes the use of logic, mathematics, statistical modelling and the value of philosophical underpinnings of economics.
Positive and Normative Economics
- Positive economics: Focuses on objective statements about how the economy actually functions (what is, was, or will be), verified by facts.
- Normative economics: Deals with subjective statements about how the economy should function (what ought to be). It incorporates value judgments and cannot be definitively proven or disproven.
- Economic methodology is complex and depends on the specific problem being studied.
Deductive and Inductive Methodology
- Deductive reasoning: Starts with a general theory and applies it to specific cases (theory-to-practice).
- Inductive reasoning: Starts with specific observations and forms broader generalizations (practice-to-theory).
- Economists often use a combination of both for research and problem-solving.
Relationship of Economics with Other Social Sciences
- Economics is closely related to political science, sociology, and psychology as they all relate to decision-making and resource management in society.
- Each discipline brings unique insights to the study of the economy impacting how resources are allocated and society functions.
- Law, history, and mathematics further contribute to economics by providing frameworks for analysis and modelling.
Role of Statistics in Economics
- Statistics are crucial in economics for collecting, analyzing, and interpreting economic data (prices, wages, employment).
- Statistical methods are used to test theories, forecast future trends, and evaluate economic policies.
- Artificial intelligence, including quantum computing, is emerging as an important tool in modern economic research.
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Description
This quiz covers the foundational concepts of economics, including the definition, the significance of scarcity, and the classification of economics into microeconomics and macroeconomics. It also explores the origins of the term 'economics' and debates whether it is a science or an art. Test your understanding of these essential economic principles.
