Module 1.1: Intro to Economics

Question 1

Science of scarcity

Answer 1

Economics

Question 2

We have unlimited wants but limited resources. Major problem of Economics

Answer 2

Scarcity

Question 3

Study of small units such as individuals, films and markets

Answer 3

Microeconomics

Question 4

Study of large Economy as a whole or economic aggregates

Answer 4

Macroeconomics

Question 5

Based on facts. Avoids value judgements (what is)

Answer 5

Positive Statements

Question 6

Includes values judgements (what ought to be)

Answer 6

Normative Statements

Question 7

All the alternatives that we give up when we make a choice

Answer 7

Trade-Offs

Question 8

Most desirable alternative that we give up when we make a choice

Answer 8

Opportunity Cost

Question 9

Satisfaction

Answer 9

Utility

Question 10

Additional

Answer 10

Marginal

Question 11

Distribute

Answer 11

Allocate

Question 12

Amount buyer (or consumer) pays

Answer 12

Price

Question 13

Amount seller pays to produce a good

Answer 13

Cost

Question 14

Money spent by a business to improve production

Answer 14

Investment

Question 15

Created for direct consumption

Answer 15

Consumer Goods

Question 16

Created for indirect consumption

Answer 16

Capital Goods

Question 17

1. Land
2. Labor
3. Capital (Human & Physical)
   4.Entreprenuership

Answer 17

Four Factors of Production

Question 18

All natural resources that are used to produce goods and services

Answer 18

Land

Question 19

Any effort a person devotes to a task for which they are paid

Answer 19

Labor

Question 20

Machines and Tools

Answer 20

Physical Capital

Question 21

Knowledge and Skills

Answer 21

Human Capital

Question 22

Ambitious leaders that combine the factors of production to create goods and services. Goal: Maximum Profit

Answer 22

Entrepreneurship