Name: محمد حازم محمد
Group: (B)
ID : 2101120210101724
Questions in page 21
1. Choices are unavoidable in economics because resources are limited, but human wants and needs
are unlimited. Therefore, individuals, businesses, and governments must make decisions about how
to allocate scarce resources efficiently to satisfy as many wants and needs as possible.
2. If I were in a position to run the economy, I would focus on implementing policies to promote
investment in infrastructure and education, encourage innovation and technological advancements,
foster a conducive business environment, ensure effective regulation, and pursue sound fiscal and
monetary policies to maintain stability and stimulate economic growth.
3. It would generally be harder for a nation to attain full production compared to full employment.
Full employment refers to utilizing all available labor resources, whereas full production requires the
efficient utilization of all available resources, including labor, capital, and natural resources, to
produce goods and services at their maximum potential.
4. Microeconomics focuses on individual economic agents such as households, firms, and industries,
analyzing their behavior and decision-making regarding resource allocation and pricing.
Macroeconomics, on the other hand, studies the economy as a whole, examining aggregate
phenomena such as national output, employment, inflation, and economic growth.
5. The three fundamental questions of economic organization are:
- What to produce?
- How to produce?
- For whom to produce?
6. When an economy is on its Production Possibility Frontier (PPF), it means that it is efficiently
utilizing all available resources to produce a combination of goods and services, maximizing output
given current technology and resource constraints.
7. Societies can answer the three main questions of economics through various economic systems,
such as:
- Market economy: Goods and services are produced and distributed based on the forces of supply
and demand.
- Command economy: Central authorities dictate what goods and services are produced and how
they are allocated.
- Mixed economy: Combines elements of both market and command economies, where the
government and the market play roles in resource allocation.
8. Major branches of economic inquiry include:
- Microeconomics: Study of individual economic units and their interactions in markets.
- Macroeconomics: Analysis of the economy as a whole, focusing on aggregate phenomena.
- Positive analysis: Descriptive analysis of economic phenomena, focusing on what is and explaining
cause-and-effect relationships.
- Normative analysis: Prescriptive analysis of economic phenomena, focusing on what ought to be
and making value judgments.
9. Production possibilities are influenced by technology and resource availability by determining the
combinations of goods and services that an economy can produce efficiently. Technological
advancements and increased resource availability can expand production possibilities, allowing for
greater output of goods and services.
10. An economy may operate below its production possibilities curve if productive efficiency is not
attained due to factors such as unemployment, underutilization of resources, inefficiencies in
resource allocation, or constraints such as government regulations or market imperfections.
11. Free resources refer to those that are not scarce and do not require any effort or sacrifice to
obtain, such as air and sunlight. Economic resources, however, are scarce and have alternative uses,
requiring decisions about how to allocate them efficiently to satisfy wants and needs. Economic
resources include land, labor, capital, and entrepreneurship.
