Week 1 Flashcards
What is Economics?
Economics is the social science studying the production, distribution and consumption of goods and services.
What does Economics focus on?
It focuses on the behavior and interactions of economic agents and how economies work.
What are the different branches or types of Economics?
Different branches of economics include: Types: 1) Microeconomics 2) Macroeconomics 3) Agricultural economics 4) Development economics 5) Political economics
What is a consumer?
- Consumers are the basic economic entity of an economy.
- All the consumers have limited income, by which the consume goods & services directly and indirectly to maximize utility.
What is producer?
A producer is one who makes and supplies goods or services.
what are the different types of producers?
- Agricultural Producers
- Industrial Producers
- Service Producers
What is the role of the government in economics?
The government’s purpose in economy is:
- To provide facilities
- To promote economic stability and growth
- it attempts to regulate and control the economy by numerous laws regarding economic activity.
when does scarcity occur?
- Scarcity occurs where it’s impossible to meet all unlimited the desires and needs of the people with limited resources i.e; goods and services.
- Society must find a balance between sacrificing one resource, which will result in getting other.
what does efficiency denote?
Efficiency denotes the most effective use of a society’s resources in satisfying people wants and needs
What is the twin theme of economics?
The twin theme of economics states that:
- Goods are ‘scarce’ and our Society must use it ‘efficiently’.
- Scarcity means insufficient resources like land, labor, and capital.
- Efficiency means maximum use of resources.
Whats the difference between microeconomics and macroeconomics?
Microeconomics is the study of economics at an individual, group or company level.
Whereas Macroeconomics is the study of a national economy as a whole.
e.g Economy of Pakistan
Why does an economy exist?
An economy exists because of two basic facts:
1) Human wants for goods and services are unlimited
2) productive resources used to produce goods and services are scarce
Why does economics state that all wants cannot be satisfied?
According to economics, wants being unlimited and our resources being limited, we cannot satisfy ALL our wants.
What are the fundamental questions of economics?
the fundamental questions in economics are:
1) What to produce?
2) How to produce?
3) And for Whom?
What is ‘rational behavior’ in Economics?
In economics, rational behavior is a decision-making process based on making choices which provide optimal level of benefit or utility to the individual.
In other words, it is rational to try to get the best thing.