16 Questions
What is the main concern of the scarce resources of an economy?
Competing usages
Which of the following is an example of a macroeconomic variable?
Aggregate demand
What does the subject matter of economics traditionally include?
Micro and Macro Economics
In a centrally planned economy, who makes all important decisions?
Government
What are the central problems of an economy?
None of the above
Which of the following is not an example of micro economic study?
National income
What is the main characteristic of a market economy?
Private entrepreneurs making economic decisions based on the market mechanism
What is the main focus of microeconomics?
Studying the economic actions of individuals and small groups
Which type of economy has the central government controlling economic activities?
Centrally planned economy
Which type of economics deals with 'what ought to be'?
Normative economics
What is the central problem of an economy related to?
Resource allocation
What type of economy functions based on demand and supply conditions?
Market economy
In a centrally planned economy, who makes decisions about the allocation of resources?
Central government
What is the scope of microeconomics?
Narrow, focusing on individual units
Which type of economics follows a scientific explanation of the workings of the economy?
Positive Economics
What problem arises due to limited resources and unlimited wants in an economy?
Opportunity cost problem
Study Notes
Scarcity and Resource Allocation
- The main concern of scarce resources in an economy is the problem of unlimited wants vs. limited resources.
Macroeconomics
- Macroeconomic variables include factors that affect the economy as a whole, such as GDP, inflation, and employment rates.
Subject Matter of Economics
- The subject matter of economics traditionally includes the study of production, distribution, and consumption of goods and services.
Centrally Planned Economy
- In a centrally planned economy, the central government makes all important decisions about the allocation of resources.
- The central government controls economic activities in a centrally planned economy.
Central Problems of an Economy
- The central problems of an economy are what to produce, how to produce, and for whom to produce.
Microeconomics
- The main focus of microeconomics is the study of individual economic units, such as households and firms.
- The scope of microeconomics includes the study of how these individual units make decisions about the allocation of resources.
- Microeconomic studies do not include the analysis of aggregate variables such as GDP or inflation.
Market Economy
- The main characteristic of a market economy is that it functions based on demand and supply conditions.
Types of Economics
- Normative economics deals with 'what ought to be', focusing on value judgments and policy recommendations.
- Positive economics follows a scientific explanation of the workings of the economy, focusing on facts and data analysis.
Economic Problems
- The central problem of an economy is related to the allocation of scarce resources to satisfy unlimited wants.
- The problem of limited resources and unlimited wants gives rise to the fundamental economic problem of scarcity.
Test your knowledge of Microeconomics Chapter 1 with this quiz. Answer questions related to scarce resources, microeconomic study examples, and macroeconomic variables.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
