- •1.What kind of science is economics?
- •2. What does economics explain?
- •4. What economic issues do we meet with every day of our lives?
- •1.What is economics?
- •11. What do economists use to explain or describe the “world that is”?
- •17. Why does positive economics avoid value judgements?
- •18. Why do economists use positive economics?
- •22. Why can some economic issues never be decided by using facts?
- •1/ What are economic resources?
- •21. What factors of production are active (flexible) and passive (fixed)? Why?
- •1.What are the three basic economic questions that every society must answer?
- •2.What makes each society look for the answers to the basic economic questions?
- •3/ How does each society make its decisions to solve the problem of scarcity?
- •6/What does the Who question mean?
- •7/What is an economic system?
- •9/What is a traditional economy?
- •11/ Why are there few social changes within a traditional economy?
- •12/What is a command economy?
- •13/ Who makes decisions on the fundamental economic questions in a society with a command economy?
- •15/Why do the individuals have very little say as to how the basic economic questions are answered?
- •16/What is a market economy?
- •19What is a free enterprise system based on?
- •20/Who owns the means of production in a society with a market economy?
- •1. Why is the theory of supply and demand considered one of the most fundamental concepts of economics?
- •2. What is demand?
- •3. What factors alter consumer demand?
- •4. What goods are considered to be related?
- •8. What does the law of diminishing marginal utility explain?
- •9. What does the law of demand state?
- •7.What is a supply schedule?
- •8.What is a supply curve?
- •9.What does supply curve enable producers to anticipate?
- •10.What does each point along the curve represent?
- •21.How does the cost of production affect the behavior of producers?
- •24.How do future expectations affect the quantity supplied?
- •25.Why are profit opportunities considered as factors that influence the quantity supplied?
- •29.Why is elasticity important in understanding supply and demand theories?
- •31.When supply is elastic?
- •In a Market Economy
- •1.What is a price?
- •3.What is a price system?
- •12. What does the characteristic of perfect competition “no barriers to enter or exit the market” mean? .
- •7. What does legal tender mean?
- •25. What does the purchasing power of money mean?
- •8.What drawbacks do they have?
- •9.What is difference between credit and debit cards?
- •11.What is a charge account?
- •14.What is a consumer credit?
- •15.What does consumer credit provide?
- •17.What is a consumer loan?
- •21. Why is savings considered one of the ways of good money management?
- •23. What factors should be considered before staring any kind of savings program? 24. What does safety mean?
- •25. What is liquidity? •
- •29. What does the yield depend on?
- •30. What accounts are offered by depository institutions?
- •32. Why do some people put their money in savings accounts? •
- •35. Why do financial institutions charge the highest interest rates on cDs?
- •38. What steps should be taken to reach financial goals?
- •6. What is a sole proprietor responsible for?
- •15. What is a corporation?
- •16. What is the essential feature of a corporation?
- •17. Who owns a corporation?
- •23. Why does a corporation have a continuous existence?
- •27. What does double taxation refer to?
- •28. What are dividends?
- •29. What is the role of the board of directors?
12. What does the characteristic of perfect competition “no barriers to enter or exit the market” mean? .
It means that there must be no obstacles to prevent firms from entering or leaving the particular market at will.
13. What is monopolistic competition?
Monopolistic competition: A state of competition in a market in which many firms compete, producing similar but slightly differentiated products
.14. What are the key characteristics of monopolistic competition? .
It is characterized by:a large number of firms producing similar but not identical products; product differentiation; some restrictions of information about market prices and quantities; relatively easy entry for firms.
15. What distinguishes monopolistic competition from perfect competition?
The process of creating uniqueness in products is known as product differentiation. It distinguishes monopolistic competition from perfect competition.
16. What is product differentiation?
The process of creating uniqueness in products is known as product differentiation.
17. Why does a firm try to differentiate its product?
Brand name, color package, location of the seller, customer service, credit conditions, or the smile of the salesperson can differentiate a product, even if the products themselves are physically equal.
18. How does product differentiation benefit consumers?
Product differentiation benefits buyers by providing them with a way to distinguish between competing goods as well as sellers by enabling them to increase their market power.
19. What is oligopoly?
An oligopoly is a market dominated by a few large suppliers
20. What are the key characteristics of oligopoly?
It is characterized by:
A limited number of leading firms producing a particular branded product. Interdependence between firms. •Barriers to entry• Lack of competitive pricing.
21. Why is it difficult for competing firms to enter the oligopolistic market?
It denotes that competing firms can enter the markets only if they pay the patent holders for permission to use the process or find a new method of production not protected by existing patents.
22. Why is competitive pricing ineffective in the oligopolistic market?
Lack of competitive pricing as oligopolists know that if they reduce or increase their prices the competitors will do the same.
23. How does oligopoly differ from monopolistic competition?
24. What is monopoly?
Monopoly: A market in which there is only one seller. A monopoly is defined as a single firm producing a product, for which there are no close substitutes. To put it another way, no other firms produce a similar product.
25. What are the qualities of monopoly? •
A single seller or monopolist who determines supply and has complete control over the market price. No close substitutes. •Barriers to entry.
26. Do supply and demand affect the market price under monopoly? Why? • A single seller or monopolist who determines supply and has complete control over the market price
27. What is imperfect competition?
Imperfect competition: A market in which there is neither pure perfect competition nor pure monopoly.
28. What types of market structure does imperfect competition comprise?
This market structure consists of industries and markets that fall in between two extremes of perfect competition and pure monopoly.
29. How does imperfect competition differ from perfect competition and monopoly?
Professor Joan Robinson referred to this kind of trade as imperfect competition in which sellers had more freedom to determine prices than they had under perfect competition, but less than they had under monopoly
MONEY.
ITS CHARACTERISTICS AND FUNCTIONS
1. What do most people think about the economy and the study of economics?
Many people think that the economy and the study of economics are concerned primarily with money – how to make it, how to spend it, and how to get more of it.
2. What is money?
Money: The official currency, in the form of banknotes, coins issued by a government that functions as legal tender. First of all, money is anything that is generally accepted in payment for goods and services, and debts and makes the trading process simpler and more efficient.
3. What served as money at different periods of time and in different parts of the world?
At different periods of time and in different parts of the world a variety of commodities served as money – cattle, sheep, furs, leather, fish, tobacco, tea, salt, etc.
4. Why were different commodities replaced by precious metals?
The economists consider that to serve effectively as money, a commodity should be rather durable, easily divisible, and portable. As none of the above-mentioned commodities possessed all these qualities, in time they were replaced by precious metals.
5. What money are people most familiar with? Nowadays the money people are most familiar with is currency.
6. What is currency? Currency refers to all coins (hard money) and paper money (soft money) issued by the central bank of a nation and held by the public within a country. It also includes cash in the vaults of commercial and savings banks and currency carried abroad by travelers.