Microeconomics 1.1: The Market System Notes and Formulas
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Questions and Answers

What is the formula for calculating profit?

  • P = TR - TC (correct)
  • P = P * Q
  • TR = P * Q
  • P = Q - P

    • What does the percentage change formula measure?

  • Change in amount as a percentage of the new amount
  • Change in quantity demanded as a percentage of the price
  • Change in price as a percentage of the quantity demanded
  • Change in amount as a percentage of the original amount (correct)

    • How is total revenue calculated?

  • TR = TC - P
  • TR = Q - P
  • TR = P + Q
  • TR = P * Q (correct)

    • What are wants in economics?

    <p>Human desires that are unlimited or infinite</p> Signup and view all the answers

    What does microeconomics focus on?

    <p>Individual agents within the economy</p> Signup and view all the answers

    What is the formula for price elasticity of demand (PED)?

    <p>PED = PercentΔInQTY Demanded / PercentΔInPrice</p> Signup and view all the answers

    What is the basic economic problem?

    <p>The unlimited wants and limited resources</p> Signup and view all the answers

    Which of the following is considered a need?

    <p>Food</p> Signup and view all the answers

    What are the four primary factors of production?

    <p>Land, labor, capital, enterprise</p> Signup and view all the answers

    What is financial capital in the context of production?

    <p>The money invested into the business to produce physical capital</p> Signup and view all the answers

    Why do businesses/individuals/governments have to make decisions on how to allocate resources?

    <p>Due to scarcity of resources and unlimited wants</p> Signup and view all the answers

    What is human capital in the production process?

    <p>The human input into the production process (e.g., workers, managers)</p> Signup and view all the answers

    What are some examples of natural resources included in the factor of land?

    <p>Water, air, minerals, soil</p> Signup and view all the answers

    What does scarcity refer to in economics?

    <p>The limited availability of resources relative to unlimited wants</p> Signup and view all the answers

    What does investment refer to in the context of production?

    <p>Increases in the level of capital</p> Signup and view all the answers

    Why do countries have to decide on 'What to Produce'?

    <p>It is impossible to produce all the goods that people want</p> Signup and view all the answers

    What is the formula for calculating profit?

    <p>P = TR - TC</p> Signup and view all the answers

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

    <p>The limited nature of society's resources</p> Signup and view all the answers

    What does the formula for percentage change measure?

    <p>Change in price</p> Signup and view all the answers

    What is the formula for price elasticity of demand (PED)?

    <p>PED = P ercent Δ In QT Y Demanded/P ercent Δ In P rice</p> Signup and view all the answers

    What does microeconomics focus on?

    <p>Individual agents within the economy</p> Signup and view all the answers

    What are wants in economics?

    <p>Human desires that are unlimited or infinite</p> Signup and view all the answers

    What is the basic economic problem?

    <p>Limited resources and unlimited wants</p> Signup and view all the answers

    What are the primary factors of production?

    <p>Land, labor, capital, enterprise</p> Signup and view all the answers

    What does investment refer to in the context of production?

    <p>Money invested into the business to produce physical capital</p> Signup and view all the answers

    What is the role of enterprise in the production process?

    <p>Control and combine the other primary factors of production</p> Signup and view all the answers

    Why do countries have to make decisions on 'What to Produce'?

    <p>To address the basic economic problem of scarcity</p> Signup and view all the answers

    What does scarcity refer to in economics?

    <p>The gap between limited resources and unlimited wants</p> Signup and view all the answers

    What are considered as needs in economics?

    <p>Food, shelter, water</p> Signup and view all the answers

    'For Whom to Produce' in economics refers to:

    <p>Method of distribution among members of the population.</p> Signup and view all the answers

    What comprises financial capital?

    <p>The money invested into the business.</p> Signup and view all the answers

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