Economy is a branch of social science that deals with the production, distribution, and consumption of goods and services.
"Economics is the study of scarcity and choice."
Three Central Problems
- What to produce?
- How to produce?
- For Whom to produce?
Factors of Production
1. Traditional Economy
An economic system where traditions, customs, and beliefs shape the goods and services produced. It passes down from generation to generation.
2. Command Economy
Resources are owned by the government. The government controls what is produced and sets the prices.
3. Market Economy (Laissez Faire)
- Owned by private sectors with no government role.
- Private sectors control supply and demand.
- Concept: Adam Smith in his book "Wealth of Nations".
- Laissez Faire: Means "Leave it alone".
4. Mixed Economy
A combination of both Market and Command (Commercial) economies. This concept was given by J.M. Keynes.
Microeconomics
Deals with behavior of small units like individuals or firms. Also known as Price Theory.
Father: Alfred Marshall
Macroeconomics
Deals with the economy as a whole and decision-making by large units. Also known as Employment, Growth & Labour.
Father: J.M. Keynes
Primary Sector
Directly associated with raw materials (Land, Water, Fisheries). Red Collar Workers.
Secondary Sector
Adds value by transforming raw materials into products. Blue Collar Workers.
Tertiary Sector
Provides services to both Primary & Secondary sectors. White Collar Workers.
Quaternary Sector
Knowledge sector services (Hospitals, Schools, Offices).
Quinary Sector
Upper class tertiary (Scientists, high-level decision makers). Gold Collar Workers.
| Economic Growth | Economic Development |
|---|---|
| Increase in Real GDP | Increase in living standards |
| Higher national income/output | Increase in educational standards |
| Quantitative Measure | Qualitative Measure |
Which branch of social science deals with the production, distribution, and consumption of goods and services?
Economics is fundamentally defined as the study of:
Which of the following is NOT one of the three central problems of an economy?
Which factor of production is specifically identified as the 'risk taker'?
How many primary factors of production are there?
An economic system that passes down its customs and methods from generation to generation is known as a:
In which economic system does the government own the resources and control the prices?
Which economic system is characterized by private ownership and the absence of government intervention?
Who provided the concept of the Market economy in the book 'The Wealth of Nations'?
What does the term 'Laissez Faire' literally mean in a market context?
A 'Mixed Economy' is a combination of which two systems?
Who is credited with giving the concept of a Mixed Economy?
Which branch of economics deals with the behavior of small units, such as individuals or firms?
Microeconomics is also commonly known as:
Who is considered the 'Father of Microeconomics'?
Which branch of economics deals with the economy as a whole and large-scale decision-making?
Who is considered the 'Father of Macroeconomics'?
Macroeconomics is also known by which of the following terms?
Which sector is directly associated with the utilization of raw materials and natural resources like land and water?
Workers in the Primary Sector are referred to as:
The Secondary Sector is responsible for adding value to natural resources by transforming raw materials into:
Which color collar is associated with workers in the Secondary Sector?
Which sector provides services to both the Primary and Secondary sectors?
Tertiary sector workers are known as:
Quaternary activities are specifically associated with which sector?
Which sector includes the 'upper class' of the tertiary sector, such as scientists?
Workers in the Quinary Sector are known as:
What is the primary indicator of 'Economic Growth'?
Economic Growth is considered a _______ measure.
Which concept refers to an increase in living standards and educational standards?
Economic Development is considered a _______ measure.