Introduction to Economics

Front

What is the definition of Economics?

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Economics is the social science that studies how individuals, businesses, governments, and societies make choices about allocating scarce resources to satisfy their unlimited wants.

Front

What are the two main branches of Economics?

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Microeconomics and Macroeconomics.

Front

What does Microeconomics focus on?

Back

Microeconomics focuses on individual units such as households and firms, and how they make decisions regarding the allocation of limited resources.

Front

What does Macroeconomics deal with?

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Macroeconomics deals with the economy as a whole, examining large-scale economic factors like inflation, unemployment, and economic growth.

Front

List some topics encompassed by the scope of Economics.

Back

Production, Distribution, Consumption, Public Finance, International Economics.

Front

What is scarcity in economics?

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Scarcity refers to the fundamental economic problem where there are limited resources to meet unlimited human wants.

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What is opportunity cost?

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Opportunity cost is the next best alternative forgone when a decision is made.

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What are the three main types of economic systems?

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Free Market Economy (Capitalism), Command Economy (Socialism/Communism), Mixed Economy.

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What does the Production Possibility Frontier (PPF) illustrate?

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The PPF illustrates all possible combinations of two goods or services that can be produced within a given economy, demonstrating opportunity cost, trade-offs, and economic efficiency.

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What are the factors of production?

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Land, Labor, Capital, and Entrepreneurship.