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Questions and Answers
What is the main focus of microeconomics?
Which of the following is an example of macroeconomics?
What type of scarcity refers to a shortage of natural resources?
Which region is notable for having many countries with limited access to water and arable land?
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What is the purpose of a supply chain?
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What is a key component of the distribution of goods?
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What does specialization in a job primarily lead to?
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Which of the following is NOT a type of scarcity?
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What is one potential consequence of inadequate quality control in manufacturing?
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Which of the following countries has the UK signed a free trade agreement with?
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What is a major objective of trade agreements the UK has with other countries?
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What type of services does Reed primarily offer?
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Which of the following is a risk associated with inadequate quality control in safety-critical industries?
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What can result from a company having a reputation for poor quality?
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What type of violation can occur due to inadequate quality control?
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Which of the following UK brands is known for car manufacturing?
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Which of the following is a characteristic of the traditional economy in the UK?
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What type of goods can be classified as concrete and visible, satisfying human wants?
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In a traditional economy, which question is primarily answered by custom or tradition?
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Which of the following best describes 'opportunity cost'?
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Which of the following is an example of a psychological want?
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What is meant by the term 'scarcity' in economic terms?
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What are local markets and fairs primarily known for in a traditional economy?
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What does the term 'fluctuate' refer to in an economic context?
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What does opportunity cost represent in economic terms?
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Which of the following correctly describes goods?
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What is considered a primary concern in economics?
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In decision making, what characterizes a traditional economy?
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Which question is NOT one of the three major economic questions?
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How does a pure command economy primarily answer economic questions?
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What represents a psychological want in the context of decision making?
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Which type of economy is characterized by discouragement of change and growth?
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What primarily guides economic decisions in a pure command economy?
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Which of the following is a potential disadvantage of a pure command economy?
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In a pure market economy, who primarily controls the economy?
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Which characteristic is NOT associated with a pure market economy?
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Which of the following correctly describes the Canadian economy?
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What role does the government play in a pure market economy?
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What economic principle primarily influences the pricing of goods and services in a pure market economy?
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What is a common opportunity cost associated with a pure command economy?
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Study Notes
Microeconomics vs. Macroeconomics
- Microeconomics focuses on individual economic units like consumers, producers, and firms.
- Macroeconomics focuses on the overall economy, including national income, inflation, unemployment, and economic growth.
Scarcity
- Refers to the limited availability of resources compared to unlimited human wants and needs.
- Countries with scarce resources often face challenges in meeting the needs of their populations.
Types of Scarcity
- Natural Resource Scarcity: Shortage of natural resources like minerals, oil, water, or fertile land.
- Economic Scarcity: Lack of economic resources like capital or technology to produce goods and services.
- Social Scarcity: Shortage of social resources, like education, healthcare, or infrastructure.
Distribution of Goods
- Involves moving products from where they are made to where they are needed or consumed.
- Key components include:
- Supply Chain: Network of organizations, people, activities, information, and resources involved in creating and delivering a product or service.
- Transportation: Movement of goods using trucks, trains, ships, or planes.
- Warehousing: Storage of goods to ensure availability when needed.
Specialization in Jobs
- Refers to focusing on a specific area of expertise within a broader field.
- Can lead to increased efficiency, higher quality work, and greater job satisfaction.
Examples of Traditional Economy in the UK
- Agriculture and Farming: Traditional methods like subsistence farming and livestock rearing continue to exist in some regions.
- Fishing: Coastal communities still rely on traditional fishing methods.
- Handicrafts and Crafts: Traditional crafts like pottery, weaving, and blacksmithing are still practiced in some regions.
- Local Markets and Fairs: Often feature traditional goods and products like handmade crafts and local produce.
Wants vs. Resources
- Wants: Needs or desires for goods and/or services.
- Physical Wants: Needs essential for human life.
- Psychological Wants: Wants for things that are not essential for human life.
- Resources: Things used to produce goods and services.
Scarcity and Opportunity Cost
- Scarcity is a fundamental economic concept.
- Opportunity Cost: Benefit lost by doing one thing instead of another.
Goods and Services
- Goods: Concrete, tangible items that satisfy human wants.
- Services: Intangible items that satisfy human wants, consumed at the time of production.
Economics
- Studies how people use scarce resources to satisfy their wants.
- Scarcity is the most important concern in economics.
Decision-Making Process
- Many choices are made on the spur of the moment with little consideration.
- Decision-making process becomes more clear when faced with complex economic problems.
Three Major Economic Questions
- What to produce?
- How to produce it?
- Who receives how much?
Economic Systems
- Societies have developed economic systems to answer these questions.
- Three model economies:
- Pure Traditional Economy: Customs and traditions guide economic decisions.
- Pure Command Economy: Governments control economic decisions.
- Pure Market Economy: Market forces of supply and demand drive economic decisions.
Canadian Economy
- A mixed economy that combines elements of a market economy and a planned economy.
Top 5 UK Goods
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- Cars
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- Pharmaceuticals
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- Aerospace equipment
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- Financial services
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- Software
Inadequate Quality Control
- Can lead to various problems:
- Defective products
- Safety hazards
- Brand damage
- Increased costs
- Regulatory violations
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Description
Explore the fundamental differences between microeconomics and macroeconomics, focusing on individual units versus the overall economy. Learn about scarcity in its various forms, including natural, economic, and social scarcity, and understand how goods are distributed within an economy.