The Nature of Economics

Question 1

Microeconomics

Answer 1

The behavior of individual decision-making units in an Economy.
Two main groups:
Consumers( households)
Firms(Businesses)

Question 2

Macroeconimics

Answer 2

The economy as a whole to obtain a broad or an overall picture of the economy.

Question 3

Scarcity

Answer 3

refers to the idea that theres insufficient resources to satisfy unlimited human need and wants(demand)

Question 4

Choices

Answer 4

Since resources are scarce. Decisions or choices are made about what will be produced and what will be forgone(not produced or sacrificed)

Question 5

Resources

Answer 5

• Also called factors of production

- Things that are used to produce goods and services.

Question 6

Examples of resources

Answer 6

Land: ( natural occurring )
Labour: ( Human effort )
Capital: ( Human made products machinery, tools,)
Enterprise: ( Risk taking, the organization of actions)

Question 7

Opportunity cost

Answer 7

• the next best alternative foregone(not produced and therefore sacrificed) when making a choice.
• Define as the first and (Only) choice.