Economics 1A: Micro Economics
(chapters 1&2)
Define economics -correct answer_the study of how society manages limited resources
What is an economy? -correct answer_the wealth and resources of a country or region,
especially in terms of the production and consumption of goods and services. What is
the main economic problem -correct answer_Scarcity, all economies have unlimited
wants but limited resources Define microeconomics -correct answer_the study of the
individual components of an economy including consumers, households and firms
Define macro economics -correct answer_the study of the economy as a whole, it
focuses on all components of the economy such as economic growth, inflation and
unemployment What is a need -correct answer_The basic requirements for survival
such as food, shelter and clothing What is a want -correct answer_human desire for
good and services that are not required for survival What is a demand -correct
answer_The desire for goods and services backed by the ability to attain them What is
opportunity cost? -correct answer_the value of the benefits lost when choosing one
alternative over another. Define the production possibility curve -correct
answer_Illustration showing the choices an entity has when producing two different
goods or services with limited resources as well as what is attainable when resources
are used efficiently What are the main contributors to the production possibility curve
-correct answer_Scarcity, opportunity costs and efficiency What are positive
statements? -correct answer_An objective statement of fact What are normative
statements? -correct answer_statements Involve an opinion or value judgement What
are the two economic schools of thought? -correct answer_The economic schools of
thought are Keynesian economics and free market economics What is the difference
between the beliefs of the Keynesian economists and market economists? -correct
answer_Keynesian economists believe that the government should play a role in the
market whereas free market economists believe that the government should be hands
off and let the market regulate itself What are the 3 central questions in economics?
-correct answer_The question of output, what should be produced, input , how should
it be produced and distribution, for whom will It be produced What is a system?
-correct answer_a combination of parts that form a network to achieve a specific goal
How are economies classed? -correct answer_Economies are classed according to 2
characteristics, property rights and coordinating mechanisms What is an economic
system? -correct answer_The way in which key economic components and resources
are organised to solve the economic problem Define property rights as a classification
of economies -correct answer_The right to hold, use, dispose and profit from physical
or intangible assets Define coordinating systems/mechanisms as a classification of
economies -correct answer_criteria that looks at who decides how to coordinate
resources and economic components How is economic activity coordinated in the
market economy ( who decides) -correct answer_economic activity works through a
market and price system How is economic activity coordinated in the command
economy -correct answer_economic activity is decided by the government according to
a central plan How the central questions in economics answered by the market
system? -correct answer_central questions are answered by the demand and supply
forces. What are the conditions for a market? -correct answer_buyer and seller
present, there must be a good or service, present demand, a market price and law or
tradition to guarantee the agreement of exchange Laissez-faire -correct answer_Idea
that government should play as small a role as possible in economic affairs, hands off
What is the meaning of a Laissez Faire government? -correct answer_the government
is hands off and lets the market place sort out economic problems this means there
are no bailouts, no business subsidies, and no government spending to stimulate the
(chapters 1&2)
Define economics -correct answer_the study of how society manages limited resources
What is an economy? -correct answer_the wealth and resources of a country or region,
especially in terms of the production and consumption of goods and services. What is
the main economic problem -correct answer_Scarcity, all economies have unlimited
wants but limited resources Define microeconomics -correct answer_the study of the
individual components of an economy including consumers, households and firms
Define macro economics -correct answer_the study of the economy as a whole, it
focuses on all components of the economy such as economic growth, inflation and
unemployment What is a need -correct answer_The basic requirements for survival
such as food, shelter and clothing What is a want -correct answer_human desire for
good and services that are not required for survival What is a demand -correct
answer_The desire for goods and services backed by the ability to attain them What is
opportunity cost? -correct answer_the value of the benefits lost when choosing one
alternative over another. Define the production possibility curve -correct
answer_Illustration showing the choices an entity has when producing two different
goods or services with limited resources as well as what is attainable when resources
are used efficiently What are the main contributors to the production possibility curve
-correct answer_Scarcity, opportunity costs and efficiency What are positive
statements? -correct answer_An objective statement of fact What are normative
statements? -correct answer_statements Involve an opinion or value judgement What
are the two economic schools of thought? -correct answer_The economic schools of
thought are Keynesian economics and free market economics What is the difference
between the beliefs of the Keynesian economists and market economists? -correct
answer_Keynesian economists believe that the government should play a role in the
market whereas free market economists believe that the government should be hands
off and let the market regulate itself What are the 3 central questions in economics?
-correct answer_The question of output, what should be produced, input , how should
it be produced and distribution, for whom will It be produced What is a system?
-correct answer_a combination of parts that form a network to achieve a specific goal
How are economies classed? -correct answer_Economies are classed according to 2
characteristics, property rights and coordinating mechanisms What is an economic
system? -correct answer_The way in which key economic components and resources
are organised to solve the economic problem Define property rights as a classification
of economies -correct answer_The right to hold, use, dispose and profit from physical
or intangible assets Define coordinating systems/mechanisms as a classification of
economies -correct answer_criteria that looks at who decides how to coordinate
resources and economic components How is economic activity coordinated in the
market economy ( who decides) -correct answer_economic activity works through a
market and price system How is economic activity coordinated in the command
economy -correct answer_economic activity is decided by the government according to
a central plan How the central questions in economics answered by the market
system? -correct answer_central questions are answered by the demand and supply
forces. What are the conditions for a market? -correct answer_buyer and seller
present, there must be a good or service, present demand, a market price and law or
tradition to guarantee the agreement of exchange Laissez-faire -correct answer_Idea
that government should play as small a role as possible in economic affairs, hands off
What is the meaning of a Laissez Faire government? -correct answer_the government
is hands off and lets the market place sort out economic problems this means there
are no bailouts, no business subsidies, and no government spending to stimulate the
