Introduction Of Economics Flashcards
Define Economics
Economics is the study of how societies manage and allocate their resources to meet their needs and wants.
Define microeconomics
Microeconomics is a branch of economics theory that studies economic decisions, actions or activities made by firms
Define macroeconomics
Macroeconomics is a branch of economics that looks at the economy as a whole, focusing on broad aggregates and overall economic trends.
What’s the difference between positive and normative economics
Positive economics deals with issues which can be observed or it deals with scientific explanations of the working of the economy. It further looks at the world as it is and different from what it should be or ought to be.
On other hand Normative economics provides the conditions that are based on personal value judgment. It doesn’t involve scientific proof or research. It tries to explain how the world should be/ought to be.
Difference between deduction and induction
Induction:This involves use of observation, collection and organization of facts about events to derive laws or theories which can be tested.
Deduction
•This is where assumptions and conclusions about events are tested against actual events.
What are the fundamental economic questions
The fundamental economic questions that every economy must answer are:
- What to produce?: Deciding which goods and services should be produced based on consumer needs, resources, and priorities.
- How to produce?: Determining the methods and resources (labor, capital, technology) to use in the production process.
- For whom to produce?: Deciding how the produced goods and services will be distributed among individuals or groups, addressing issues of accessibility and fairness.
Define utility in economics
In economics, utility refers to the satisfaction or pleasure derived from consuming goods and services.
