Introduction to Economics

What is the basic economic problem?

• excess supply of goods and services

• lack of profits

• recession

• scarcity of resources

What is the cause of scarcity in an economy?

• high employment levels

• high investment levels

• unlimited resources

• unlimited wants

A consumer has $10 to spend. A meal costs $9 and a drink costs $5. What would describe the situation if the consumer did not have enough money to purchase both the meal and the drink?

• excess demand

• the economic problem

• free goods

• market failure

Economics is regarded as a science because?

• its subject matter studies human behaviour

• its issues can be easily verified by reference to facts

• it adopts scientific methods in making its analysis

• its issues are relevant for national development

Which of the following is an example of a Household as an economic agent?

• A company producing smartphones

• A family deciding how to spend their monthly income

• The government setting tax rates

• A foreign firm exporting goods to another country

Which economic agent is primarily involved in making decisions about production, pricing, and investment?

• Firms

• Households

• Government

• Foreign Sector

Microeconomics analyses choices in various situations. Which area of economic study does it not include?

• policies for economic growth

• individual consumer behaviour

• costs and revenues of a firm

• wages for different occupations

Which person makes macroeconomic decisions?

• a bank manager

• a shareholder in a firm

• a government finance minister

• a worker

The main concern of economists is to

• • satisfy all human wants

• • allocate scarce resources to satisfy human wants

• • redistribute income between the rich and the poor

• • control the growth of population

The three principal economic unit in any system are

• • workers, consumers and shareholders

• • companies, industry and plants

• • households, firms and governments

• • trade, industry and banking