Lecture 1

Question 1

What is the definition of economics?

Answer 1

How people, businesses, governments, and nations use limited resources to produce, consume, and distribute goods/services.

Question 2

In what category of sciences is economics classified?

Answer 2

Social sciences (e.g., anthropology, sociology).

Question 3

What is the focus of microeconomics?

Answer 3

Individual agents (firms,consumers)

Question 4

What are the key aspects of microeconomics?

Answer 4

Demand, supply, pricing.
Market structures and consequences of decisions.

Question 5

What is the focus of macroeconomics?

Answer 5

Entire economy.

Question 6

What are the key aspects of macroeconomics?

Answer 6

National productivity, economic growth, price levels.
Sectors: Total consumer behaviour and total firm behaviour

Question 7

What is positive economics?

Answer 7

Objective, fact-based
Can be proved right or wrong
Eg: Unemployment rate is 4% in china
Unemployment will increase next
year.

Question 8

What is normative economics?

Answer 8

Subjective, value-based
It cannot be proved right or wrong
Eg:India ought to curb unemployment.

Question 9

What is equity in economics?

Answer 9

Fair distribution of income and wealth

Question 10

What is interdependence and intervention in economics?

Answer 10

Interdependence - Interaction between consumers, firms, and governments
Intervention - Govt market involvement

Question 11

Fill in the blank: The focus of economics is the allocation of _______.

Answer 11

scarce resources

Question 12

What does the term ‘economic well-being’ refer to?

Answer 12

Factors like prosperity, quality of life, and income levels

Question 13

What is an economic good?

Answer 13

Scarce and has opportunity cost

Question 14

What is a free good?

Answer 14

Abundant,no opportunity cost (e.g., clean air in rural areas, sunlight).

Question 15

What must be done due to scarcity?

Answer 15

Choices must be made.

Question 16

What does income limitation lead to?

Answer 16

Allocation decisions for goods/services.

Question 17

What is opportunity cost?

Answer 17

Next best alternative forgone

Question 18

What types of goods have opportunity costs?

Answer 18

Economic goods.

Question 19

What does the law of diminishing marginal utility state?

Answer 19

As consumption rises, marginal utility decreases.

Question 20

What can cause goods to shift from free to economic?

Answer 20

Changes in availability (e.g., land in early America vs. now).

Question 21

What are government-provided goods?

Answer 21

Economic goods provided free due to tax funding (e.g., roads, parks).

Question 22

What is total utility?

Answer 22

Overall satisfaction from a quantity.

Question 23

What is marginal utility?

Answer 23

Added satisfaction from one more unit.

Question 24

What does consumer behavior explain regarding utility?

Answer 24

The first unit has the highest value and subsequent units are valued less without price reduction.

Question 25

What is the core issue in economics?

Answer 25

Resources are scarce, wants are infinite

Question 26

What are the three key questions in economics?

Answer 26

* What to produce and in what quantities? Allocation of scarce resources. * How to produce? Production methods (Labour or capital intensives). * For whom to produce? Distribution of goods and services.

Question 27

What is market method?

Answer 27

Free market economy, private ownership, economic decisions on the basis of market ,price rationing

Question 28

What is a planned economy?

Answer 28

Ownership: Public (government) Decision-Making: Centralized government planning Rationing: Non-price; based on government plans

Question 29

What are the disadvantages of a pure free market economy?

Answer 29

* Overprovision of harmful goods * Underprovision of merit goods * Environmental/resource depletion * Inequality, vulnerable groups unsupported * Industry domination

Question 30

True or False: In a free market economy, the government has centralized control over economic activities.

Answer 30

False

Question 31

Fill in the blank: In a free market, allocation is achieved through _____ based on supply and demand.

Answer 31

[prices]

Question 32

What are the disadvantage of pure planned economy?

Answer 32

Complex, inefficient resource allocation. No price system. Low motivation. Loss of personal freedom and government corruption.

Question 34

thi lAS

Question 35

TION

Question 36

Basics of

Question 37

Economics

Question 38

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Question 39

Modern

Question 40

Economies

Question 41

and Mixed

Question 42

Systems

Question 43

Economy

Question 44

Factors of

Question 45

Production (FoP):

Question 46

Types of Capital:

Question 47

Definition: Blend of market

Question 48

mechanisms and government

Question 49

planning.

Question 50

Characteristics: -

Question 51

Key

Question 52

Features of

Question 53

-Mixed

Question 54

Market

Question 55

Economies:

Question 56

CExamples:

Question 57

Resource Allocation

Question 58

and Income

Question 59

Distribution:

Question 60

Economy Foundation Module

Question 61

Private and public sectors share

Question 62

roles in ownership/decision-

Question 63

making.

Question 64

Balance varies by country;

Question 65

evolving into market-based mixed

Question 66

systems.

Question 67

Private Sector Role: Determines

Question 68

production/sales decisions.

Question 69

Government Role: Manages public

Question 70

services (e.g.

Answer 70

healthcare

Question 71

infrastructure) and influences

Question 72

private sector through policies (e.g.

Question 73

regulations

Answer 73

taxes).

Question 74

USA/UK: Market-dominant

Answer 74

limited

Question 75

intervention.

Question 76

Nordic Countries: Focus on

Question 77

income redistribution.

Question 78

Japan: Coordination with private

Question 79

sector activities.

Question 80

Definition: Assignment of resources to

Question 81

uses; involves deciding "what/how

Question 82

much" and "how" to produce.

Question 83

Wages.

Question 84

SARRTHIAS

Question 85

Reallocation: Shifting resources based

Question 86

on new priorities.

Question 87

Output/Income

Question 88

Distribution:

Question 89

Determines who

Question 90

receives produced

Question 91

goods and services.

Question 92

Redistribution of

Question 93

Income: Changes in

Question 94

income/output

Question 95

allocation.

Question 96

Land: Natural resources (e.g.

Question 97

minerals

Answer 97

forests) → Income: Rent.

Question 98

Labor: Human effort

Question 99

(manual/intellectual) → Income:

Question 100

Capital: Physical assets

Question 101

(machinery

Answer 101

tools)→ Income:

Question 102

Interest.

Question 103

Entrepreneurship: Innovation

Question 104

risk-taking → Income: Profit.

Question 105

Physical Capital: Man-made

Question 106

resources (machinery) for

Question 107

production.

Question 108

Human Capital: Skills

Answer 108

education

Question 109

health enhancing productivity.

Question 110

Natural Capital: Environmental

Question 111

resources essential for

Question 112

life/economy.

Question 113

Financial Capital: Investments

Question 114

generating monetary returns.

Question 115

Social Capital: Network-based

Question 116

resources facilitating

Question 117

support/access.