Midterm

Question 1

Describe economics as a social science

Answer 1

economics is a social science that applies rigorous methods to study how people interact, whether in business, financial transactions, or leisure activities

Question 2

Define microeconomics

Answer 2

Microeconomics focuses on individual decision-making, such as households deciding how much groceries to buy or firms determining their production levels

Question 3

Explain the concept of incentives in Economics

Answer 3

Incentives are factors that motivate individuals to make certain decisions. These can be positive (rewards) or negative (penalties) and influence behavior

Question 4

How does macroeconomics differ from microeconomics?

Answer 4

Macroeconomics studies aggregate behaviour of large groups like countries, focusing on factors like GDP and interest rates, while microeconomics analyzes individual and firm decision-making

Question 5

Describe the role of production factors in Economics

Answer 5

Production factors in econ refers to land, labor, and capital, determining how goods and services are produced, the technology and automation used, and the quantity produced.

Question 6

Explain the impact of individual decisions on national events in Economics

Answer 6

Individual decisions when aggregated, can lead to significant national events as seen in phenomena like the shortage of toilet paper during COVID-19, where individual choices caused a widespread issue

Question 7

Describe the concept of capital in economics

Answer 7

Capital in economics refers to not just money, but also what money cabn buy, including technology, materials, and other resources used in production

Question 8

define the term ‘self interest vs social interest’ in econ

Answer 8

understanding when individuals acting in their own interest can benefit society, and when it may not, it involves analyzing the impact of individual actions on the collective welfare

Question 9

how does economics help individuals become better citizens?

Answer 9

Economics helps individuals become better citizens by providing a framework to understand concepts with political consequences, such as self interest vs social interest, economic fairness, and the role of monopolies in society

Question 10

Do economics play a role in design and branding?

Answer 10

Yes, econ plays a significant role in design and branding by helping to understand consumer behaviour, decision-making processes, pricing strategies, and the influence of aesthetics on customer preferences

Question 11

describe the relevance of understanding incentives in econ for designers

Answer 11

understanding incentives in economics is relevant for designers as it helps them comprehend how people make decisions, respond to stimuli, and determine the appropriate pricing for their products or services

Question 12

how does econ address the issue of necessary evils in society?

Answer 12

helps identify necessary evils in society and provides tools to solve problems using econ principles. It distinguishes between malevolent actions and necessary societal structures, offering solutions to mitigate unnecessary evils

Question 13

what is the economic equilibrium?

Answer 13

a state in a market-based economy in which economic forces, such as supply and demand are balanced

Question 14

what is capital?

Answer 14

the assets that allow for increased work productivity

Question 15

What is GDP

Answer 15

Gross Domestic Product - the standard measure of the value added created through the production of goods and services in a country during a certain period

Question 16

what is Elasticity

Answer 16

measures the responsiveness of one economic variable to change in another. (if the price elasticity of the demand of something is -2, a 10% increase in price causes the quantity demanded to fall by 20%)