Microeconomics

Question 1

What are the 3 economic questions?

Answer 1

What Goods and Services will be produced and in what quantities?
How will the goods and services be produced?
For whom will these goods and services be produced?

Question 2

Define Market Capitalism?

Answer 2

Market Capitalism is an economic system which allocates resources based on the interaction between consumers and producers. Consumers demand fuels the production of goods and services and ultimately decides where resources are allocated.

Question 3

Define Planned Socialism?

Answer 3

Planned Socialism is an economic system where the government is primarily responsible for resource allocation. The Government may make long-term and short-term plans about what to produce, how to produce it and who gains the produce after it is produced.

Question 4

Define Planned Capitalism?

Answer 4

Planned Capitalism refers to an unusual economic system whereby the government directs the private owners of productive assets to produce certain goods and services - often used during war time (when the owners of production factors are directed to the production of G+S needed for defence).

Question 5

Define Market Socialism?

Answer 5

Market Socialism is an economic system where the government owns most of the resources but markets determine what goods and services are ultimately produced.

Question 6

Define Microeconomics?

Answer 6

Microeconomics is the study of the economic behaviour of individuals as consumers and producers. In particular, the the factors that influence the choices made by individuals and businesses.

Question 7

Define Scarcity?

Answer 7

Scarcity is the comparison between society’s needs/wants and the resources available to meet those needs/wants. \

Question 8

When does Relative Scarcity occur?

Answer 8

Relative Scarcity occurs when society’s wants and needs are unlimited, and there are a finite amount of resources.