Micro Notes 1

Question 1

3 important questions economists ask:

Answer 1

what to produce?
how to produce it?
for whom to produce?

Question 2

focuses on individual decision-making units and how they interact

Answer 2

microeconomics

Question 3

explores the economy as a whole and how the whole economies interact

Answer 3

macroeconomics

Question 4

the fixed amount of goods or services available

Answer 4

scarcity

Question 5

an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rule and manner of their distribution also referred to as a subsistence economy, a traditional economy is defined by bartering and trading

Answer 5

traditional economy

Question 6

an economic system in which the means of production are publicly owned and economic activity is directed by a central government or portion of the government

Answer 6

command economy

Question 7

an economic system in which the forces of supply and demand determine what goods and services are produced

Answer 7

market economy

Question 8

an economy which practiced characteristics of both command and market economies; supply and demand largely influence the economy, but there is government intervention to meet certain economic goals

Answer 8

mixed economy