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 (B)</p> Signup and view all the answers

What does microeconomics focus on?

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

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

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

What is the basic economic problem?

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

Which of the following is considered a need?

<p>Food (A)</p> Signup and view all the answers

What are the four primary factors of production?

<p>Land, labor, capital, enterprise (D)</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 (B)</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 (B)</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) (D)</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 (A)</p> Signup and view all the answers

What does scarcity refer to in economics?

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

What does investment refer to in the context of production?

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

What is the formula for calculating profit?

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

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

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

What does the formula for percentage change measure?

<p>Change in price (B)</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 (C)</p> Signup and view all the answers

What does microeconomics focus on?

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

What are wants in economics?

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

What is the basic economic problem?

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

What are the primary factors of production?

<p>Land, labor, capital, enterprise (C)</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 (D)</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 (D)</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 (D)</p> Signup and view all the answers

What does scarcity refer to in economics?

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

What are considered as needs in economics?

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

'For Whom to Produce' in economics refers to:

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

What comprises financial capital?

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

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