1. the central economic problem

Question 1

ceteris paribus

Answer 1

all other factors remain unchanged

Question 2

key assumptions

Answer 2

ceteris paribus and rationality

Question 3

microeconomics

Answer 3

individual parts, study of how households and firms make choices

Question 4

macroeconomics

Answer 4

study of econs as a whole, topics such as economic growth, unemployment and inflation

Question 5

positive statement

Answer 5

statement whose accuracy can be tested

Question 6

normative statement

Answer 6

value judgement

Question 7

consumption

Answer 7

purchase and use of goods and services to satisfy human needs and wants

Question 8

production

Answer 8

transformation of factors of productions into goods and services to satisfy human needs and wants

Question 9

types of factors of production

Answer 9

capital: man made goods used to produce other goods
entrepreneurship: responsible for decision making process, risk taker
land: natural resources
labour: human beings

Question 10

scarcity

Answer 10

limited wants, unlimited resources

Question 11

goals of EC agents

Answer 11

consumers: utility
producers: profit
government: social welfare

Question 12

order of scarcity, choice and opportunity cost

Answer 12

s,c,o

Question 13

opp cost

Answer 13

value of next best alternative

Question 14

free goods

Answer 14

no opp cost
eg wild fruits

Question 15

‘there is no such things as free lunch in econs’ T/F

Answer 15

T. there is a next best alt use of ur time

Question 16

you and your friend spend an hour studying econs, opp cost is diff. why?

Answer 16

1. next best alt is diff
2. same next best alt, diff val placed on activity

Question 17

production possibility curve

Answer 17

combo of 2 goods a country can produce within given time periods with all its resources fully and efficiently utilised