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What are the factors of production, and how do they contribute to economic activities?
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The factors of production are land, labor, and capital. They are necessary inputs for producing goods and services.
Give an example of a public good and explain its purpose.
A public park is a public good, provided by the government for communal use and enjoyment.
Give an example of investment and explain its purpose.
Buying land is an example of investment. The purpose is future wealth creation.
Contrast microeconomics with macroeconomics.
Microeconomics studies individual units, while macroeconomics studies the economy as a whole.
What differentiates capital goods from consumer goods?
Capital goods are used to produce other goods (e.g., machines, tools), whereas consumer goods are directly used for consumption (e.g., food, clothes).
According to Alfred Marshall, what does economics study?
Alfred Marshall stated that economics is the study of mankind in ordinary business life.
What are the primary distinctions between needs and wants?
Needs are essential for survival (e.g., food, clothing, shelter), while wants are non-essential desires for goods/services (e.g., dining out, accessories).
What defines the act of consumption in economics?
Consumption is the act of using goods/services by a consumer.
What is Adam Smith's definition of economics?
Adam Smith defines economics as a science of the wealth of nations.
How is a service different from a good?
A service is an intangible action performed by others (e.g., medical check-ups), whereas a good is a tangible item (e.g., books).
Explain the concept of utility in economics.
Utility is the capacity of a commodity to satisfy human wants.
Define consumer goods and give two examples.
Consumer goods are directly used for consumption. Examples include food and clothes.
What is the primary purpose of economic activities?
The primary purpose of economic activities is to earn money.
What aspect of human behavior does Lionel Robbins' definition of economics focus on?
Lionel Robbins' definition focuses on human behavior as a relationship between ends and scarce means.
What are the main sources of income in economics, also referred to as factors of income?
The main sources of income are rent, wage, interest, and profit.
Who is considered the Father of Economics, and what was his contribution?
Adam Smith is considered the Father of Economics; he defined economics as a science of the wealth of nations.
Describe an example of a non-economic activity.
A mother teaching her child at home is an example of a non-economic activity, done out of love or respect.
In the context of economics, what is exchange?
Exchange is the act of selling and buying goods/services.
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