DAY 1 -The Nature of Economics

What kind of science is economics?

• formal science

• natural science

• social sciences

Economics is defined as a scientific study primarily focused on

• How societies create and distribute wealth among different social classes

• The behavior, interaction, welfare, and decisions made by individuals and groups.

• The efficient allocation of abundant resources to meet specific community demands.

• How man allocates scarce resources to produce goods and services to satisfy his unlimited wants and needs.

economic also studies

(a)  

Macroeconomics is best described as the study of:

• a) Individual consumer choices and their impact on market prices.

• b) How specific industries compete within a national economy.

• c) The overall economy, including national and international issues like unemployment and international trade.

• d) The allocation of resources within a single business firm.

Microeconomics primarily focuses on the study of:

• a) Large-scale economic phenomena such as inflation and national debt.

• b) Government policies designed to influence global trade.

• c) The decisions made by individuals and firms regarding the allocation of scarce resources within small economic units.

• d) The overall performance and structure of a nation's entire economy.

Households are also known as

• patron

• consumer

• customer

• occupants

• client

Firms are also known as

• producer

• organization

• manufacturer

• partnership

• company

According to economic assumptions, households are primarily considered to be the owners of:

• a) Final goods and services produced for consumption.

• b) The factors of production: Land, Labour, Capital, and Entrepreneurship.

• c) Government bonds and national debt.

• d) Public infrastructure and natural monopolies.

Firms, or producers, are economic units primarily defined by their role in:

• a) Regulating market prices and ensuring fair competition.

• b) Consuming factors of production directly from natural resources.

• c) Producing goods and services by purchasing factors of production from households.

• d) Distributing government subsidies to individual consumers.

In many economies, the government's role is described as providing:

• a) Direct competition for all private firms and businesses.

• b) Unlimited resources to households for consumption.

• c) Sole control over all factors of production.

• d) The framework of rules and laws for economic operations, and sometimes engaging in production.