the economic problem

Question 1

what is the economics and the economy?

Answer 1

Economics is a social science concerned with the production, distribution and consumption of goods and services.
The economy is a system of producing, distributing and consuming goods and services.

Question 2

what is the economic problem?

Answer 2

satisfying unlimited needs and wants with limited resources.

Question 3

what are the most important scarce resources in the world?

Answer 3

land, labour, and capital.

Question 4

what is 1 goal of economics?

Answer 4

A goal of economics is to improve efficiency in the use and allocation of the world’s scare resources.
Land, labour and capital are all scarce.

Question 5

what is land in economics?

Answer 5

All natural resources used in the production of a good or/and service. EG: water, oil, copper, area, sand etc.

Question 6

What is labor in economics?

Answer 6

Human effort put into the production of goods and/or services.

Question 7

what is capital in economics?

Answer 7

Man made resources used in the production of goods and/or services.

Question 8

what is entrepreneurship in economics?

Answer 8

Someone that combines land, labor, and capital to earn a profit.

Question 9

what are households in economics?

Answer 9

Households own all the factors of production (LLCE). They then sell the resources to firms resource (or factor) markets.

Question 10

what are resource markets in economics?

Answer 10

Resource markets take the factors of production (LLCE), and use it to create materials that firms can then buy. Some materials could include, equipment, labor, materials etc, in exchange for money.

Question 11

What are firms in economics?

Answer 11

Firms buy the factors of production what the resource (or factor) markets sell - which are then used to produce their ideal/wanted good and/or service.

Question 12

what is production in economics?

Answer 12

Production is an economic activity where an individual or organization uses labor, capital, and other goods and services to create goods or services that satisfy human needs or wants. The production process is under the control and responsibility of the institutional unit carrying out the activity. The inputs used in production are transformed into outputs, which are the final products or services produced by the unit.

Question 13

what is consumption in economics?

Answer 13

Consumption is when people or organizations use up goods or services. This can be either intermediate (used in the production process) or final (used for personal satisfaction). Essentially, consumption is the act of using goods and services to satisfy the needs or wants of individuals or groups.

Question 14

How do we measure economic growth in economics?

Answer 14

Gross domestic product (GDP)

Question 15

How does economic growth occur?

Answer 15

An increase in any of the factors of production.

Question 16

what is microeconomics?

Answer 16

Microeconomics is concerned with the behaviour of consumers, firms and resource owners, who are the most important economic decision-makers in a market economy.

Question 17

what is macroeconomics?

Answer 17

Macroeconomics is a branch of economics that studies how an overall economy—the market systems that operate on a large scale—behaves. Macroeconomics studies economy-wide phenomena such as inflation, price levels, rate of economic growth, national income, GDP, and changes in unemployment.

Question 18

what is aggregate demand?

Answer 18

‘Aggregate demand’ in macroeconomics is the total demand for goods and services across an entire economy.

Question 19

what are the aggregate demand components?

Answer 19

AD = C + I + G + (x – m)
C = consumption
I = Investment
G = Government spending
X = exports
M = imports