Microeconomics Week 1

Question 1

Activity of making, providing, purchasing, or selling goods or services.

Answer 1

Economic activity

Question 2

Any action that involves producing, distributing, or consuming products or services is an _______.

Answer 2

Economic activity

Question 3

Activities exist at all levels within a society. Additionally, any activities involving money or exchange of products or services are ______.

Answer 3

Economic activities

Question 4

Levels of economic activity

Answer 4

Primary sector, secondary sector and tertiary sector

Question 5

Provides services to consumers and the other sectors of industry

Answer 5

Tertiary sector

Question 6

Manufactures goods using the raw materials provided by the primary sector

Answer 6

Secondary sector

Question 7

Extracts and uses the natural resources of the earth

Answer 7

Primary sector

Question 8

Basic Economic Activities

Answer 8

Production, Consumption, Employment and Income Generation

Question 9

The use of economic resources in the creation of goods and services for the satisfaction of human wants.

Answer 9

Production

Question 10

The using up of goods and services by consumer purchasing or in the production of other goods.

Answer 10

Consumption

Question 11

The use of economic resources in productions; engagement in activity.

Answer 11

Employment

Question 12

The production of maximum amount an individual can spend during a period without being any worse off.

Answer 12

Income Generation

Question 13

As spending for acquisition of utility, major concept in economics and is also studied in many other social sciences.

Answer 13

Consumption

Question 14

It is seen in contrast to investing, which is spending for acquisition of future income. Different schools of economist define _____ differently.

Answer 14

Consumption

Question 15

Relationship between two parties, based on contract where work is paid for, where one party, which may be a corporation, for profit, not-for-profit, organization, co-operative.

Answer 15

Employment

Question 16

Other entity is the employer and the other is the employee.

Answer 16

Employment

Question 17

Derivative transaction involving the writing of covered options, caps, or floors that is intended to generate income or enhance return.

Answer 17

Income generation

Question 18

Factors of production

Answer 18

Land, Labor, Capital and Enterprise

Question 19

Solid surface of Earth that is not permanently covered by water.

Answer 19

Land

Question 20

Majority of human activity throughout history has occurred in ___ areas that support agriculture, habitat, and various natural resources.

Answer 20

Land

Question 21

Labor pool in employment, generally used to describe those working for a single company or industry, but can also apply to a geographic region like a city, state or country

Answer 21

Labor, workforce or labor force

Question 22

Types of Labor

Answer 22

Unskilled Labor, Semi-skilled labor, Wage Employees and Contract Labor

Question 23

Does not require training

Answer 23

Unskilled Labor

Question 24

Requires some education or training

Answer 24

Semi-skilled Labor

Question 25

Supervised by a boss
Receive a set weekly or bi-weekly wage as well as benefits

Answer 25

Wage Employees

Question 26

A contract specifies the work to be produced
The amount is paid either commission or a set fee for the work
Benefits are not paid

Answer 26

Contract Labor

Question 27

Term for financial assets, such as funds held in deposit accounts and/or funds obtained from special financing sources.

Answer 27

Capital

Question 28

Can also be associated with ____ assets of a company that requires significant amounts of capital to finance or expand.

Answer 28

Capital

Question 29

Person who combines the other economic resources for use in the production of goods and services.

Answer 29

Entrepreneur

Question 30

Decides on the combination of land, labor and capital to be used in production.

Answer 30

Entrepreneur

Question 31

Price income is earned by the entrepreneur and is called profit. Amount that is left behind after all allocations to the other economic resources have been made.

Answer 31

Entrepreneurship

Question 32

The economic problem

Answer 32

What to produce, how to produce and for whom to produce

Question 33

Problem related to the selection of goods and services to be produced.

Answer 33

What to produce

Question 34

Has to decide whether to produce consumer goods such as rice, wheat, clothes, etc. or to produce capital goods such as machinery and equipment.

Answer 34

What to produce

Question 35

Refers to selection of technique to be used for production of goods and services.

Answer 35

How to produce

Question 36

Goods can be produced using different techniques of production. By ‘technique’, we mean which particular combination of inputs to be used.

Answer 36

How to produce

Question 37

An economy has to allocate its resources and choose from different potential bundles of goods, select from different techniques of production, and decide in the end who will consume the goods.

Answer 37

For whom to produce

Question 38

Four types of economic system

Answer 38

Mixed, traditional, command and market

Question 39

Relies on customs, history, and time-honored beliefs.

Answer 39

Traditional economy

Question 40

Societies with ______ depend on agriculture, fishing, hunting, gathering or some combination of them. They use barter instead of money.

Answer 40

Traditional Economy

Question 41

An economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand.

Answer 41

Market economy

Question 42

A system where the government, rather than the free market, determines what goods should be produced.

Answer 42

Command economy

Question 43

How much should be produced, and the price at which the goods are offered for sale. It also determines investments and incomes.

Answer 43

Command economy

Question 44

Defined as an economic system blending elements of planned economies, free markets with state interventionism, or private enterprise with public enterprise.

Answer 44

Mixed economy

Question 45

Characteristics of Mixed Economy

Answer 45

Co-existence of public and private sector
Existence of economic planning
Role of price system and government directives
Government regulation and control over private sector
Consumers sovereignty protected
Government protection of labor
Reduction of economic inequalities