Introduction to Economics 1 Dersi 1. Ünite Sorularla Öğrenelim

Define economics briefly.

Economics is the study of how society sets its priorities in managing its scarce resources.

Define scarcity.

Scarcity refers to the society’s inability to produce all the goods and services people desire to have because of deficiency of resources.

Briefly define the term opportunity cost.

The opportunity cost of a desired item or outcome to a person is what that person has to give up to get that item or to achieve that outcome

What is Production Possibilities Frontier?

It is a graph that shows the combinations of output that a firm or a society can possibly produce using the available production technology and the given amount of inputs.

Define efficiency.

Efficiency refers to the ability to put a given amount of scarce resources into use in such a way to produce the highest level of output that could be produced with the available production technology.

Define equity.

Equity refers to the distribution of resources fairly among members of the society

What does the term marginal refer to in economics?

The term marginal is used frequently in economics to refer to small incremental adjustments made on an existing plan of action.

When does a market failure occur?

A market failure occurs when the market falls short of allocating resources efficiently.

Briefly explain the term externality.

An externality is the one that often has unintended impact that an economic actor’s actions on the well being of another actor who stands by.

Briefly explain market power.

Market power is the ability of a single actor (or a few actors) to control or substantially influence market prices.

Define microeconomics.

Microeconomics is the a main branch of economics that studies the behavior and decisions of the smallest decision units such as individuals or households and firms.

What does macroeconomists study? 

Macroeconomists study how a country’s economy as a whole is structured and works, by paying particular attention to the effects of monetary and fiscal policies pursued by the government.

What is inflation?

Inflation is the increase in the general price level (or overall level of prices) in the economy within a given period of time.

What are the factors that determine the productivity level of a country?

The primary determinant of productivity is the level of investment in physical capital (all machinery and equipment used in production), and investment in human capital (improvement of people’s productive skills through education and training). Thus, investment is the recipe for increasing economywide productivity levels.

Define the term 'scientific method'?

Scientific method involves the development of theories after careful observation of the relevant behavior of economic agents and real world phenomena, and then putting those theories to test by using data.

Define positive statements.

Positive statements in economics are statements that intend to describe how things are and how things actually work.

What is a normative statement?

A normative statement is a prescriptive statement, like the ones expected to be made by a policy adviser, involving normative judgements and prescriptions about how the world should be.

Briefly mention about 'thinking at the margin'.

Thinking at the margin requires recognizing the need to make decisions by evaluating the costs and benefits of marginal changes. It means that a decision maker should compare the marginal benefit and the marginal cost of his/her actions. Any action should be undertaken only if the benefit is greater than the cost. For example, the decision concerning whether to go to a university for an advanced degree or not must be made by comparing the costs (the fees and foregone wages) with the expected benefit (the extra income you could earn with the extra year of education).

What are the fundemental problems economics adresses?

What to produce?

How to produce?

For whom to produce?

Provide some examples of marginal thinking.

All you can eat restaurants

Unlimited night usage on cell phones

Discounted rides for senior citizens

Discounts in fairs on last days