Introduction to Economics: Scarcity

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What is the reward for the use of capital?

Interest (correct)

Savings

Exchange

Depreciation

In a traditional economy, who primarily owns and produces goods?

Firms

Government

State

Households (correct)

What does opportunity cost refer to?

The value of what is given up (correct)

The value of savings

The value of the next best alternative

The value of current consumption

Which factor of production refers to the reduction of productivity of capital?

Capital Signup and view all the answers

What is a key characteristic of a market economy or capitalism?

Decisions are made by individuals Signup and view all the answers

Which economic system involves a mix of market and command systems?

Mixed Economy Signup and view all the answers

What is the primary focus of microeconomics?

Studying the behavior of individuals and firms in decision-making Signup and view all the answers

Which theory in microeconomics involves consumers aiming to maximize happiness by choosing a mix of goods within their budget?

Utility theory Signup and view all the answers

What is the goal of producers in the production theory of microeconomics?

Minimize costs and maximize profits Signup and view all the answers

Which type of microeconomics deals with describing economic phenomena without opinions, focusing on facts and objective analysis?

Positive Microeconomics Signup and view all the answers

In perfect competition, what aligns to establish economic equilibrium?

Prices Signup and view all the answers

Which branch of economics involves subjective judgments and opinions about how things should be or what ought to happen in the economy?

Normative economics Signup and view all the answers

What is economics primarily concerned with?

Balancing the demand for goods and services with their limited availability Signup and view all the answers

Who is considered the 'Father of Economics'?

Adam Smith Signup and view all the answers

What does the term 'Wealth' refer to in economics?

Anything with economic value Signup and view all the answers

Which of the following is NOT one of the 3 Es in economics?

Excellence Signup and view all the answers

What does the term 'Consumption' refer to in economics?

Utilization or usage of goods and services by consumers Signup and view all the answers

What are the four basic economic questions that need to be addressed?

What to Produce, How to Produce, How much to Produce, For whom to produce Signup and view all the answers

What does macroeconomics study?

Relationships among broad economic aggregates Signup and view all the answers

How is national output related to income?

National output generates equivalent income Signup and view all the answers

What measures unemployment?

Percentage of jobless individuals Signup and view all the answers

What is deflation?

Decrease in prices of goods and services Signup and view all the answers

Which sector does macroeconomics NOT focus on?

Individual stock market investments Signup and view all the answers

What do macroeconomic policies aim to achieve?

Job creation, wealth, and improved living standards Signup and view all the answers

What is the main function of monetary policy?

Regulating the money supply in an economy Signup and view all the answers

Why does the demand curve generally slope downwards?

As prices fall, consumers substitute for other goods Signup and view all the answers

What does the Y-axis represent on a demand curve graph?

Price of the products Signup and view all the answers

What is the purpose of a demand schedule?

To illustrate factors affecting demand Signup and view all the answers

Which factor does NOT influence demand according to the text?

Government revenue generation Signup and view all the answers

What does the law of demand state?

Quantity demanded increases as price decreases Signup and view all the answers