APPLIED ECONOMICS

Question 1

The study of how society manages its resources.

Answer 1

Economics

Question 2

It is the study of choice under the conditions of scarcity.

Answer 2

Economics

Question 3

Is a social science that deals with the two extremes: scarce resources and unlimited human demands.

Answer 3

Economics

Question 4

It is a scientific study which deals with how individuals and society in general makes choices.

Answer 4

Economics

Question 5

According to _______, Economics is the study of how society manages its resources.

Answer 5

Mankiw

Question 6

_____ and ______ states that economics is the study of choice under the conditions of scarcity.

Answer 6

Hall, Leiberman

Question 7

Economics, according to _____, is a scientific study which deals with how individuals and society in general makes choices.

Answer 7

Sicat

Question 8

It is the understanding of how society allocates its resources under the condition of scarcity.

Answer 8

Economics

Question 9

Is is defined as the limited nature of society’s resources.

Answer 9

Scarcity

Question 10

It is when resources are being allocated in the most efficient manner.

Answer 10

Full Production

Question 11

All employed resources are used so that they provide the maximum possible satisfaction of our material wants.

Answer 11

Full Production

Question 12

Includes physical resources (land and capital) and human resources (labor and entrepreneurial ability).

Answer 12

Full Production

Question 13

It is when a society’s available human resources are being maximized efficiently.

Answer 13

Full employment

Question 14

It is a condition of an economy in which all qualified people who want to work can find employment at customary wage rates.

Answer 14

Full employment

Question 15

Without it, there would be no need for production and distribution since the goal of economics is to suffice the consumer wants and needs.

Answer 15

Consumption

Question 16

It is the ulitilization of a good or a service for one’s very own satisfaction.

Answer 16

Consumption

Question 17

Economic resources are also know as ______.

Answer 17

Factors of production

Question 18

What are the four factors of production?

Answer 18

Land, Labor, Capital, Entrepreneurship

Question 19

The physical space on which production takes place, as well as useful materials – natural resources – found under it or in it, such as crude oil, iron, coal, or fertile soil.

Answer 19

Land

Question 20

______ refers to the time and effort, both physical and mental, spent in producing goods or services.

Answer 20

Labor

Question 21

This is also termed as human resources.

Answer 21

Labor

Question 22

Capital has two economic types as a factor of production.

Answer 22

Physical capital and human capital

Question 23

______ consists of things like machinery and equipment, factory buildings, computers and even hand tools like hammers and screwdrivers.

Answer 23

Physical capital

Question 24

Refers to the skills and knowledge possessed by workers.

Answer 24

Human capital

Question 25

The ability and willingness to combine the other resources – land, labor, and capital – into a productive enterprise.

Answer 25

Entrepreneurship

Question 26

It is a condition of an economy in which all qualified people who want to work can find employment at customary wage rates.

Answer 26

Full employment

Question 27

______ does not imply 100% employment since allowances must be made for frictional employment and unemployment and seasonal factors.

Answer 27

Full employment

Question 28

It is what we must forego when we make a choice.

Answer 28

Opportunity cost

Question 29

When making any decision, such as whether to attend college, decision-makers should be aware of the ______ that accompany each possible action.

Answer 29

Opportunity cost

Question 30

It is the allocation of the total product (money incomes) among factors of production.

Answer 30

Distribution

Question 31

In general theory, each unit of output corresponds to a unit of income. Land – ______ Labor – ______ Capital – ______ Entrepreneurship – ______

Answer 31

Land – RENT Labor – WAGES Capital – INTEREST Entrepreneurship – PROFIT

Question 32

Since economics emphasizes on maximizing the scarce resources it concerns the production, distribution and consumption of goods and services. This is vital because once resources are improperly managed, people loses their opportunity to enjoy one’s benefit.

Answer 32

The concerns of economics

Question 33

Due to the problem of scarcity, every ______ needs to function to satisfy societal needs.

Answer 33

economic system

Question 34

Given such scarce resources, it believed that choices must be made regarding: ______, ______, ______

Answer 34

What to produce and how much of each commodity to produce. How to produce it. For whom to produce.

Question 35

It refers to the way in which the resources of a country are used to produce goods and services, and the manner in which these goods and services are distributed for consumption.

Answer 35

economic system

Question 36

An economic system is a mechanism which deals with the ______, ______ and ______ of goods and services in a particular society.

Answer 36

production, distribution, consumption

Question 37

Different types of economic system.

Answer 37

Capitalist economy/Capitalism, Socialist economy/Socialism, and Mixed economic system.

Question 38

The system under which economic system is controlled and regulated by the government so as to ensure welfare and equal opportunity to the people in a society.

Answer 38

Socialist economy/ Socialism

Question 39

It is the system in which means of production are owned and managed by the government.

Answer 39

Socialist economy/Socialism

Question 40

Eg: Cuba and North Korea

Answer 40

Socialist economy/Socialism

Question 41

Is an economic system based on private ownership and the freedom of individuals to conduct their economic affairs without interference from government bodies or other groups.

Answer 41

Capitalism

Question 42

A great deal of freedom of choice exercised by consumers and business firms in the market for commodities and resources.

Answer 42

Capitalist economic system

Question 43

Eg: USA, Australia, Japan, Canada, etc.

Answer 43

Capitalist economy/ Capitalism

Question 44

The capitalist economy is also known as the _______.

Answer 44

free exchange economy

Question 45

Also known as free exchange economy.

Answer 45

Capitalist economy

Question 46

Freedom to own property, freedom to buy and sell, and freedom from government interference in the economic aspect of each individual’s life.

Answer 46

Capitalist economy/Capitalism

Question 47

Main Features of Socialist Economy: 5

Answer 47

•Economic, Social and Political Equality •No Competition •Positive Role of Government •Work and Wages According to Ability and Needs •Maximum Social Welfare

Question 48

Main Features of Mixed Economic System: 3

Answer 48

•Co-existence of Private and Public Sector •Check on Economic Inequalities •Control of Monopoly Power

Question 49

Under socialism, there is almost equality between rich and poor. There is no problem of class struggle.

Answer 49

Economic, Social and Political Equality

Question 50

Unlike capitalistic economy, there is no cut throat competition. It means lack of competition as state is the sole entrepreneur.

Answer 50

No Competition

Question 51

In socialism, government plays significant role in decision making. Thus, government has complete control over economic activities like distribution, exchange, consumption, investment and foreign trade etc.

Answer 51

Positive Role of Government

Question 52

It means that there is no scope of exploitation of labour class. Government keeps a close eye on the needs of the poor masses while formulating plans.

Answer 52

Maximum Social Welfare

Question 53

Under the mixed economic system, government takes huge initiatives to control monopoly practices among the private entrepreneurs through effective legislative measures.

Answer 53

Control of Monopoly Power

Question 54

It is a mixture of capitalism and socialism.

Answer 54

Mixed Economic System

Question 55

Under this system there is freedom of economic activities and government interferences for the social welfare.

Answer 55

Mixed Economic System

Question 56

Hence it is a blend of both the economies.

Answer 56

Mixed Economic System

Question 57

E.g. India—developing country, UK & USA—developed countries, etc.

Answer 57

Mixed Economic System

Question 58

According to _______, “Mixed economy is that economy in which both public and private sectors cooperate.”

Answer 58

Prof. Samuelson

Question 59

_______ is that economy in which both public and private sectors cooperate.

Answer 59

Mixed economy

Question 60

In public sector, industries like defence, power, energy etc., are set up. On the other hand, in private sector all the consumer goods industries, agriculture, small-scale industries are developed.

Answer 60

Co-existence of Private and Public Sector

Question 61

In this mixed economic system, government takes several measures to reduce the gap between rich and poor through progressive taxation on income and wealth. The subsidies are given to the poor people and also job opportunities are provided to them. Other steps like old age pension, free medical facilities and free education are also taken to improve the standard of poor people.

Answer 61

Check on Economic Inequalities: