MICROECONOMICS

QUIZ WEEK 1

ECONOMICS

from the greek word “oikonomia’ which means household management economics is a social science that studies how individuals, businesses, and governments allocate resources to meet their needs and desires.

give the three economics and fundamental questions

what to produced, how to produced, for whom to produced

MASLOWS HIERARCHY OF NEEDS THEORY

suggests that human needs are arranged in levels, beginning with basic survival requirements and progressing toward personal fulfillment. You must satisfy the lower levels first before moving to higher levels of happiness or fulfillment.​

physiological needs

are the most basic human needs necessary for survival example water, food, warmth rest

safety and security needs

the need for protection and security needs

love and belonggingness needs

Human beings naturally seek social interaction and meaningful relationships.​ example relaationship and friends

esteem needs

The desire for recognition, respect, confidence, and achievement example prestige and feeling of acccomplished

self actualization

represents the highest level of human motivation example achiving ones full potential

microeconomics

the branch of economics that studies the behavior and decision-making processes of individual economic units such as consumers, households, workers, and businesses

macroeconomics

a branch of economics that studies the behavior of an overall economy (aggregate), which encompasses markets, businesses, consumers, and governments.

positive microeconomics

focuses on facts, observations, and cause-and-effect relationships. It explains what is likely to happen under specific conditions. ​
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Examples: ​
• If the price of cars increases, consumers will likely buy fewer cars. ​
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• If the supply of copper decreases, copper prices will likely increase.

norative microeconomics

focuses on opinions and value judgments regarding what should happen. ​
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Examples: ​
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• The government should regulate prices during emergencies. ​
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• Companies should increase wages to improve employee welfare.

inflation

refers to the sustained increase in the general price level of goods and services over time

unemployment

occurs when individuals who are willing and able to work cannot find employment opportunities. High unemployment reduces household income, weakens consumer spending, and slows economic growth.​

frictional unemployment

temporary unemployment that happens when people are between jobs or entering/re-entering the workforce while searching for a suitable job.

structural unemployment

Unemployment caused by a mismatch between workers' skills and the skills employers need, often due to technology or industry changes.

cyclical unemployment

Unemployment that occurs during economic recessions when businesses reduce production and lay off workers due to lower demand.

seasonal unemployment

Unemployment that occurs during certain times of the year when demand for specific jobs decreases

economic growth

refers to the increase in a country's production of goods and services over time. Growth is commonly measured through increases in Gross Domestic Product (GDP).​

national income

refers to the total earnings generated within an economy during a given period. ​

fiscal policy

refers to government decisions regarding taxation and public spending. ​

monetary policy

refers to actions taken by a central bank to regulate money supply and interest rates.​

sectors of the economy

Economic activities are classified into sectors based on the nature of production and services provided. Traditionally, economies were divided into three sectors. However, modern economies increasingly recognize the fourth and fifth sectors due to advancements in technology and knowledge-based industries.​

primary sectors

the sector involves the extraction and utilization of natural resources directly from nature.​

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Examples include:​

• Agriculture ​

• Fishing ​

• Forestry ​

• Mining ​

• Livestock production ​

secondary sectors

the sector transforms raw materials into finished or semi-finished products through industrial processes.​

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Examples include:​

• Manufacturing ​

• Construction ​

• Food processing ​

• Utilities ​

• Industrial production ​

tertiary sectors

the sector provides services rather than physical products.​

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Examples include:​

• Banking and finance ​

• Healthcare ​

• Education ​

• Transportation ​

• Tourism ​

• Retail trade ​

• Information services ​

• ​

quarternary sectors

the sector represents the knowledge and information-based segment of the economy.​

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Examples include:​

• Information Technology ​

• Artificial Intelligence ​

• Research and Development ​

• Data Analytics ​

• Telecommunications ​

• Software Development ​

• Biotechnology

quinary sectors

the sector consists of top-level decision-makers and leaders responsible for strategic governance and policy direction.​

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Examples include:​

• Presidents ​

• Government officials ​

• Cabinet members ​

• CEOs ​

• University presidents ​

• Senior executives ​

• International organization leaders ​

GDP gross domestic product

measures the total market value of all final goods and services produced within a country's borders during a specific period.​

GDP is considered the primary measure of economic performance.​

GNP gross national product

measures the total value of goods and services produced by a country's citizens regardless of where production occurs.​