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Question 1

What is economics

Answer 1

is the social science that studies how people interact the production, distribution, and consumption of goods and services.

Question 2

Macroeconomics

Answer 2

looks at the whole economy and the factors that affect the nation’s general economic conditions.

Question 3

Microeconomics

Answer 3

Microeconomics examines the smaller bits that help to make up the overall economy. These include examining the operation of a particular firm, an individual market, a sector or a specific industry.

Question 4

Positive economics

Answer 4

Positive economics Most commonly, economics uses positive analysis of issues where the investigation is largely free of personal values, feelings or opinions, and is based on hard factual evidence about the situation as it exists in reality.

Question 5

Normative economics

Answer 5

Normative economics Sometimes, personal, value-based statements are also made by economists about what should be done, based on their personal opinions, likes and dislikes. This is called normative economics.

Question 6

three types of resource

Answer 6

natural resources (i.e. the gifts of nature)
labour resources (i.e. mental talents and the physical power of workers)
capital resources (i.e. equipment that make other resources more efficient).

Question 7

Relative scarcity

Answer 7

Relative scarcity is simply the imbalance between people’s unlimited wants and limited resources available to satisfy those wants.

Due to the problem of scarcity, economic choices must be made and it is vital that resources are used or allocated efficiently to help maximise satisfaction.

Question 8

Economic activity

Answer 8

Economic activity is a term used to describe the production process where firms use resources and convert them into the finished goods and services we need and want.

Question 9

GDP

Answer 9

GDP measures the total market value (gross) (domestic) goods and services produced (product) in a given year.

Question 10

Non-material living standards

Answer 10

Non-material living standards refer to the quality of our daily lives and mostly relate to influences not closely related to money or income such as freedom, happiness, crime rates and the environment.

Question 11

Economic activity

Answer 11

Economic activity or production may both help and harm aspects of overall living standards but, more often than not, there are trade-offs.

Question 12

who has a higher living standards

Answer 12

Nations that have higher levels of production per person generally have higher average material living standards or wellbeing than countries with lower levels of GDP per head, because they have higher average incomes and consumption levels per person.