Introduction to Economics

What is the primary focus of economics as a social science?

• the study of natural phenomena

• the analysis of human behavior in relation to scarce resources

• the evaluation of political systems

• the examination of technological advancements

The fallacy of composition refers to:

• assuming what is true for one individual is true for the whole group

• the idea that all decisions are rational

• misinterpreting correlation as causation

• believing that all resources are unlimited

Positive economics is primarily concerned with:

• what ought to be

• what is

• ethical implications of economic policies

• political agendas

Economic efficiency can be illustrated by:

• producing goods with maximum waste

• allocating resources in a way that maximizes output

• equal distribution of wealth

• high levels of unemployment

An example of normative economics is:

• analyzing unemployment rates

• assessing the impact of tax cuts on GDP

• arguing that a minimum wage should be increased

• studying consumer behavior

Which of the following is NOT a factor of production?

• land

• labor

• capital

• profit

Which factor of production includes human-made goods such as machines?

• land

• labor

• capital

• entrepreneurship

How do labor and capital interact in production?

• labor replaces capital

• capital enhances the productivity of labor

• labor is independent of capital

• capital is only used by entrepreneurs

Which of the following is a significant natural resource of the Philippines?

• high technology

• tropical forests

• financial markets

• advanced education

Scarcity in economics refers to:

• unlimited resources

• limited resources to meet unlimited wants

• the absence of choice

• high demand for goods