Week 1: Introduction to Course and Introduction to Economics

Question 1

Economics

Answer 1

is the study of how people manage their resources to meet their needs and enhance their well-being (quality of life).

Question 2

How do we manage well-being?

Answer 2

• Diet
• Housing
• Medical care
• Education
• Access to transportation
• Entertainment

Question 3

Resource management

Answer 3

is the practice of planning, scheduling, and allocating people, money, and technology to a project or program

Question 4

Production

Answer 4

using or converting some of these resources to make goods or services

Question 5

Distribution

Answer 5

refers to the sharing of products and resources among people

Question 6

Consumption

Answer 6

final use.

Question 7

Production, Distribution, and consumption occur within three specific spheres:

Answer 7

1) Core: households, families. Communities

2) Business: firms that produce goods and services for profitable sale

3) Public: governments, NGO’s, etc. enhance human well-being without making profits

Question 8

What does Free market capitalism look like:

Answer 8

• Focus on the business sphere.
• Businesses are incentivized by profit to use resources efficiently and produce things that people want.
• Business-friendly legal system
• Relatively low taxes on corporations and wealthy individuals
• The small welfare state and few regulations

Question 9

What does market socialism look like:

Answer 9

• Focus on the core and public sphere.
• Government guarantees certain rights and equity

Question 10

Economists create theories and models about how things work, steps:

Answer 10

1. To test their ideas, they gather evidence to see if their hypothesis is supported or not.

 Historical data –
 Empirical data –
 Qualitative data –

2. From there they develop goals and targets to enhance well-being.

Question 11

Socialism

Answer 11

-based on collective ownership of the means of production
- alll production and distribution decisions are made by the goverment
- government determine output and pricing levels
- believes in production for use rather than profit

Question 12

Communism

Answer 12

• classless society
• private property is mine existent
• the means of production are owned communally

Work according to your abilities
Get paid by your needs

Question 13

Central Planning

Answer 13

government decides what is produced, how it is produced, who does what job, and how goods and services are distributed.

Question 14

Economic Systems

Answer 14

• Socialism
• Communism
• Central planning

Question 15

1. Economics is the study of:

• The allocation of scarce resources
• Money, debt, and finance
• Resource management to meet needs and improve well-being
• Government spending and production

Answer 15

-

Question 16

2. Match the bullet point to the letter:
   * Production
   * Resource management
   * Distribution
   * Consumption

A. Buying and wearing a Burberry t-shirt
B. Allocating Burberry revenues to employees and managers
C. Using cotton to make a Burberry t-shirt
D. Making sure enough cotton crop is grown for next year

Answer 16

-

Question 17

3. T/F The physical environment in which an economy is in doesn’t really change how resources are managed, production, distribution, or consumption in that economy.

Answer 17

False

Question 18

4 -6. Match each bullet point with one of the following: core sphere, business sphere, or public purpose sphere.
* Government producing vaccines for COVID-19 for free
* Gucci producing luxury items for sale
* Families raising children at home

Answer 18

-

Question 19

7. T/F Economics is like a rule-book based in facts that do not change over time.

Answer 19

False

Question 20

8. T/F. We generally don’t need to test our theories in economics

Answer 20

False

Question 21

9. We can test economic theories using:
   * Historical data
   * Qualitative data
   * Empirical data
   * All of the above

Answer 21

-

Question 22

10. T/F Developing goals and targets is part of the economic way of thinking.

Answer 22

True

Question 23

11. Match the sphere to the letter:

• Core sphere
• Business sphere
• Public sphere

A. Federal law prohibits Gucci from making dog fur products
B. Parents dressing their kids in Gucci clothes
C. Gucci produces luxury items for sale

Answer 23

-

Question 24

12. True or False: Although there have been many economic systems in the past, free-market capitalism is the only economic system existing in our modern world today.

Answer 24

False

Question 25

13. Give an example of the economic way of thinking. (you can make one up or use a real one from your life).

Answer 25

examines how people make choices under conditions of scarcity and systems of production, consumption, and distribution. It also