) As a factor of production, the term capital includes: 8) A) tools, machinery,
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) As a factor of production, the term capital includes: 8) A) tools, machinery, and buildings. B) natural resources such as land and water C) stocks and bonds issued by corporations. D) services provided by the government that enable businesses to be more productive. ) Which of the following is a benefit of owning your own business? 9) A) Government supported health insurance B) Shorter work hours C) More camaraderie with employees D) Freedom to keep the profits from your business ) Taxes and government regulations are part of the environment of 10) business. A) competitive C) economic and legal B) technological D) social is considered by some to be the father of modern cconomics. A) John Maynard Keynes C) Adam Smith B) Thomas Malthus D) Thomas Carlyle 2) Which of the following would be a topic emphasized in a microeconomics class? A) How the government can use fiscal and monetary policies to stabilize the economy. B) How market conditions determine the price of a specific product. C) How a nation's GDP is computed. D) The reasons why the unemployment rate for the economy is rising or falling. 3) How is it that people working in their own self-interest produce goods, services, and 13) wealth for others? A) The government pays entrepreneurs in the U.S. to produce goods, services, and wealth for others. B) Entrepreneurs tend to include themselves in a group of people who need charitable support. A portion of the entreprencur's profit (as required by law) goes to the charity of one's choice to support the less fortunate. would provide jobs, and subsequently wages for others. self-interest could hire others at very low wages C) In order to earn money and produce goods that improve lives, self-directed gain D) By taking advantage of a vast supply of labor, people working in their owrnExplanation / Answer
Ans 8) As a factor of prouduction, the term capital includes Tools, machinery and building. Sometimes refered as 3Ms - Men, machinery and money. These three lead to desired output.
Ans 9) The biggest benefit of owning your own business is profit which you need not share with others. Thus, it gives the entrepreneur the freedom to keep the profits from the business. It also gives power to decide and more flexibility in terms of operations. For some motivated individuals, it also leads to satisfaction of their self-actualisation needs (as per Maslow's need hierarchy)
Ans 10) Taxes and Government regulations are part of the economic and legal environment of business. Both these elements are beyond the control of business and rightly termed as its external environment. It is dynamic, volatile,ambigous, complex and uncertain (VUCA)
Ans 11) Adam Smith is considered to be the father of modern economics for his path breaking work on the economic systems and international trade.
Ans 12) Option B: How market conditions determine the price of specific products
Micro economics as a field of study deals with economic concepts at the micro level i.e., households and markets It deals with all those reasons and concepts which impact the demand and supply of a product or service. Whereas Macro econmics deals with country as a whole and discusses all imporatnt decision variables having hude impact on economy at the macro level.
Ans 13) In order to earn money and produce goods that improves lives, self directed gain would provide jobs and subsequently wages for others. Thus business as an economic activity though fueled by self motivated goal of profit, leads to job creation, more purchasing power and good quality of goods and services. This is how people working for their own self interest produce goods, service and wealth for others.
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