Questions and Answers
The ______ of demand refers to the responsiveness of the quantity demanded of a good to changes in its price or other influential factors.
elasticity
The ______ function shows the various combinations of inputs that can produce a given level of output.
production
The ______ of supply states that as the price of a good increases, the quantity supplied of the good also increases, ceteris paribus.
law
The ______ cost is a cost that remains the same even if the level of production changes.
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The ______ of production is a period of time in which at least one input is fixed.
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The ______ is the highest amount of output that can be produced with a given set of inputs.
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The ______ of returns states that as the quantity of a variable input is increased, the marginal product of that input will eventually decrease.
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The ______ of scale refers to the cost advantages that a firm can achieve by increasing its production levels.
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The ______ run supply curve of an industry shows the relationship between the price of the product and the quantity supplied in the short period.
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A ______ is a market structure in which there is only one buyer of a particular good or service.
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The ______ national product is the total value of all final goods and services produced within a country's borders.
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The ______ income is the income that is available to individuals for disposal after paying taxes.
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Inflation is a situation in which there is a sustained ______ in the general price level of goods and services in an economy over a period of time.
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The ______ price is the price that is likely to prevail in a market in the long period.
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The ______ curve of an industry shows the relationship between the price of the product and the quantity supplied in the long period.
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The concept of ______ refers to the study of individual economic units such as households and firms.
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The ______ approach to consumer behaviour of demand is based on the idea that utility is measurable and can be compared.
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The ______ curve is a graphical representation of various combinations of two goods that provide the same level of satisfaction to the consumer.
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The ______ of demand states that as the price of a good increases, the quantity demanded of that good will also increase, ceteris paribus.
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The ______ is the graphical representation of the relationship between the price of a good and the quantity demanded of that good.
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The ______ is the excess of the maximum amount that a consumer is willing to pay for a good over its market price.
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[Blank] economics is concerned with the study of individual economic units such as households, firms, and markets.
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The ______ Possibility Curve (PPC) is a graphical representation of the various combinations of two goods that can be produced given the available resources and technology.
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Study Notes
Introduction to Economics
- Economics definition and central problems of an economy
- Production Possibility Curve (PPC) and Opportunity Cost
Subject Matter of Economics
- Divisions of Economics: Traditional and Modern approaches
- Microeconomics and Macroeconomics
- Inductive and Deductive methods of Economic Investigation
- Economics: a Science or an Art?
- Positive and Normative Economics
Laws of Economics
- Marshall's definition of Economic Laws
- Nature of Economic Laws
- Basic assumptions in Economics
Basic Terms and Concepts in Economics
- Wants, goods, and classification of necessaries
- Classification of goods/wants and services
- Utility, forms of utility, value, price, money, wealth, and welfare
- Income, savings, and investment, consumption
Consumer Behaviour
- Approaches to consumer behaviour of demand: Marginal or Cardinal utility approach and Ordinal utility approach
Marginal or Cardinal Utility Analysis of Demand
- Assumptions and Law of Diminishing Marginal Utility
- Law of Equi-Marginal Utility
Ordinal Utility Analysis or Indifference Curve Analysis
- Assumptions and indifference map
- Indifference curve, Marginal Rate of Substitution, and price line or budget line
- Consumer's equilibrium through indifference curve analysis
Consumer's Surplus
- Meaning and assumptions
- Explanation and difficulties in measuring consumer's surplus
- Importance of consumer's surplus
Theory of Demand
- Concept of demand, definition, and Demand function
- Determinates of demand, Demand schedule, and Individual consumer demand
- Market demand, Demand curve, and different kinds of demand
- Interrelated demand and Law of demand
Elasticity of Demand
- Meaning of elasticity of demand
- Types of elasticity of demand (price, income, and cross elasticity)
- Degrees of price elasticity of demand and determinants
- Measurement of price elasticity of demand and practical importance
Theory of Production
- Producer's behaviour and Supply: Meaning of supply, supply function, and supply schedule
- Supply curve, Law of supply, and assumptions
- Determinants of supply, movement vs. shifts of the supply curve
- Price elasticity of supply and degrees of price elasticity of supply
Production Economics
- Characteristics of dairying as a business and differences between dairy production and industrial production
- Dairy production economics and basic production problems in economics
- Short run and long run production, terms, and concepts in production economics
Production Function
- Types of production function: Input-Output Relationship
- Returns to a factor or Short run production function
- Law of Returns and Law of Variable Proportion
- Returns to Scale or Long run production function
- Law of Increasing returns to scale, Law of Constant returns to scale, and Law of Decreasing returns to scale
- Production function with two variable inputs
- Production isoquants, isocost lines, and elasticity of substitution
- Isocline
Concepts of Costs
- Cost of production: explicit cost and implicit cost
- Fixed cost and variable cost, short run and long run costs
- Total cost, average, and marginal costs
- Relationship between total, fixed, and variable costs
- Related cost concepts and Law of costs
Economies and Diseconomies of Scale
- Supply curve of industry: short run supply curve and long run supply curve
- Causes for changes in supply and economies and diseconomies of scale
Concept of Market
- Elementary concepts of markets, market definition, and essential features of a market
- Classification of market based on geographical area, function, nature of competition, and degree of competition
- Market structures based on the degree of imperfect competition
- Salient features of perfect competition, monopoly, and monopolistic competition
- Comparison between perfect competition, monopoly, and monopolistic competition
Pricing and Output under Different Market Situations
- Market price and normal price
- Price determination under perfect competition, monopoly, monopolistic competition, and oligopoly
National Income
- Concepts of national income: Gross domestic product (GDP), Gross national product (GNP), Net national product (NNP), Net domestic product (NDP)
- National income at factor cost, personal income, disposable income, and Per capita income
- Inflation and Deflation
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Test your understanding of the basics of economics, covering definitions, central problems, production possibility curves, and more!
