Microeconomics

Question 1

Define economics

Answer 1

The study of scarcity within the economy

Question 2

Define scarcity

Answer 2

Insufficiency of economic resources to fulfil humans demand

Question 3

Define trade off

Answer 3

Choosing how to spend one resource between alternative uses

Question 4

Opportunity cost

Answer 4

Value of the best alternative that must be sacrificed in doing a particular activity

Question 5

What are the three economic questions

Answer 5

What goods and services are to be produced?
How are they to be produced?
For whom are they to be produced?

Question 6

What are the facts of production

Answer 6

Land
Labour
Capital
Entrepreneurship

Question 7

What are the four concentric zones around the central market

Answer 7

CBD
zone of transition
Suburban zone
Rural urban fringe

Question 8

What is the CBD ?

Answer 8

Optimum location for shops,commerce and services

Focus of inner city transport

Question 9

What’s is the zone of transition

Answer 9

Historically, urban residential
Currently, warehousing and wholesaling
Mix of land uses with constant change

Question 10

What is the suburban zone

Answer 10

Moderate residential use

Large establishments are moving in eg hospitals, universities

Question 11

What is the rural urban fringe

Answer 11

Well beyond the suburban zone

Used by people willing to commute to work in towns and cities

Question 12

What is market demand

Answer 12

The total quantity of a good or service demanded by all potential buyers in a market

Question 13

What is the Law of demand

Answer 13

When the price increases quantity decreases

Vice versa

Question 14

What is the market demand curve

Answer 14

The relationship between the total quantity demanded of a good or service during a certain period of time and the price per unit

Question 15

What are the factors affecting demand for construction

Answer 15

Price of the product 
Non price determinants 
(Population) 
(Price of substitutes)
(Level of income)
(Credit availability)
(Government policy )

Question 16

What is market supply

Answer 16

Total quantity of a good or service within a market

Question 17

What is the Law of supply

Answer 17

If price increases so does quantity

Vice versa

Question 18

What’s is the market supply curve

Answer 18

The relationship between the total quantity supplied in a given timer period and price per unit

Question 19

What are the factors affecting Construction supply

Answer 19

Price of product 
Non price determinants 
(Cost of production)
(Government taxes and subsidies)
(Supply chain management)
(Expectations about future prices)

Question 20

What is a market

Answer 20

A set of arrangements by which buyers and sellers exchange goods and services

Question 21

Name the two extreme types of market structure

Answer 21

Monopoly and perfect competition

Question 22

Name the two in between types of market structure

Answer 22

Monopolistic competition and oligopoly

Question 23

What are the characteristics of a construction market

Answer 23

Imperfectly competitive (shows some but not all features of 
Competitive markets )
Frequently either monopolistic co,petition or oligopoly in terms of structure

Question 24

What is market equilibrium

Answer 24

The point at which both consumers and producers wishes are met

Question 25

What are the three types of production behaviour used by firms

Answer 25

Profit maximisation
Law of diminishing marginal returns
Cost curves