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Questions for my economics test
what are the two branches of economics
Macroeconomics and Microeconomics
What is the Economics formula:
Businesses and government generates: production, income, employment Expenditure examples: buying/selling,trading,production
What are Econimic Basic
Need and Wants
What is needs
Things that are essential for
: food, water, clothing shelter etc.
What is wants
A want: something we would like to have, but we can survive without
What are the
Land, Labour, Capital and Enterprice
Any naturally occurring materials, called
Example of land:
Minerals, gold, animal, wheat
When a person works, they are using their labour rsources
what is a capital resource?
Man made resources
Factories, machines, tool, computer that helps labour increase in production
What is enterprice?
The skill combining the factors of production also known as
Example of Enterprice:
Etreprenuers: Bill Gates, Dick Smiths Steve Jobs
What is scarcity?
Scarcity, the basic economic problem. Knowing what we cant have everything and so we must choose between competing alternative
The scarcity diagram:
limited resources-->economical choices
What is opportunity cost?
The ability to make choices without scare resources.
The value of opportunity cost
The value of the
. It is the opportunity that you "gave up" in order to have the opinion that considered to be the most desirable.
PPC or PPF as a graph
Why economic system?
Nations use economic systems to determine how to
effectively to provide people minimum standard of living
Different types of economic systems
Fund in rural, under-developed countries
Pygmies of congo, eskimos and indian tribe, Australian aborigines
-customs/rituals govern economic decisions
-no commercial activity
-resources are used to meet basic needs
The advantages and disadvantages
People have specific roles, life is simple
Technology not used, new ideas discouraged, standard of living never change.
what is Command economy
Governments determines what, how and for whom goods and services are produced