Economics and Its Problems

What is the definition of economics?

• The study of how households and firms make decisions and how they interact in markets

• The study of economy-wide phenomena, including inflation, unemployment, and economic growth

• The science that studies how to allocate limited resources to meet the needs of unlimited human wants

• The study of how to maximize profit in a business

What are the factors of production?

• Natural resources, human resources, and tools to increase production

• Goods and services produced by firms

• Income earned by households

• Money and financial resources

What does the Production Possibility Frontier (PPF) represent?

• The ability to produce goods and services using limited resources

• The choices made by households and firms in the market

• The opportunity cost of producing one good over another

• The distribution of income and wealth in an economy

What is the circular flow diagram in the economy?

• A visual model of how monetary value flows through markets among households and firms

• A diagram showing the distribution of income and wealth in an economy

• A representation of the choices made by households and firms in the market

• A model of how resources are allocated to meet unlimited human wants

What is the role of innovation and technology in the current economic conditions?

• To maximize profit in businesses

• To increase the distribution of income and wealth

• To meet the various needs of human beings through digital interactions and transactions

• To minimize the opportunity cost of production

What is one of the economic problems faced in Indonesia?

• High inflation decreasing purchasing power

• Low economic growth

• High unemployment rate

• All of the above

What is the main focus of microeconomics?

• Inflation, unemployment, and economic growth

• How households and firms make decisions and interact in markets

• The allocation of limited resources to meet unlimited human wants

• The study of aggregate economic phenomena

What is the main focus of macroeconomics?

• Inflation, unemployment, and economic growth

• How households and firms make decisions and interact in markets

• The allocation of limited resources to meet unlimited human wants

• The study of aggregate economic phenomena

What is the opportunity cost of producing one good over another?

• The point outside the production possibility frontier

• The efficient choice along the production possibility frontier

• The slope of the production possibility frontier

• The decrease in the amount of production of one good when increasing the production of another

What is the role of the government in the economy?

• To maximize profit in businesses

• To increase the distribution of income and wealth

• To maximize welfare

• To minimize the opportunity cost of production