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BSNS113 Exam 2024 | Bsns 113 Actual Exam Questions and Correct Answers Rated A+
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BSNS113 Exam 2024 | Bsns 113 ActualExam 2024-2025 Questions and Correct
Answers Rated A+
Economics -ANSWER-study of how resources are managed in society
Scarcity -ANSWER-limited means but unlimited wants
Three economic questions -ANSWER-What to produce? How to
produce? For whom to produce?
Incentives -ANSWER-people react to changes in their economic
environment. Changes in price or incomes cause people to act
differently
Economic costs -ANSWER-opportunity cost. The total net value of the
next best alternative forgone when making a decision.
Opportunity cost formula -ANSWER-OC of activity A = total cost of A +
any benefit lost from B - costs avoided choosing A (NO SUNK
COSTS)
Positive economics -ANSWER-scientific study of economics. Portrays
facts and uses words like 'is'
Normative economics -ANSWER-evaluating side of economics.
Portrays opinions and uses words like "ought" and "should"
Interdependence -ANSWER-economic agents rely on each other to
meet their current level of goods and services.
,PPF assumptions -ANSWER-One country, two goods, fixed level of
resources and technology and resource heterogeneity (differ in quality
of production of each good)
PPF -ANSWER-A, B, C, X = feasible combinations. A, B, C =
technically efficient. E = economically efficient. D = infeasible in the
current economy
Technically efficient -ANSWER-producing the maximum amount of
goods and services given its inputs
Economic efficiency -ANSWER-economy is producing approximately
equal amount of both goods
PPF shifts outwards -ANSWER-economic growth; if a resource or
technology that affects both goods increases
PPF shift outwards for one good -ANSWER-an improvement in
technology or resources for one good. This makes the PPF steeper
Absolute advantage -ANSWER-being able to use fewer inputs to
provide a good or service than another producer
Comparative advantage -ANSWER-the ability to produce a good or
service at a lower opportunity cost than another producer
Trade between countries -ANSWER-producers supply what they have
a comparative advantage in and demand what they do not
Opportunity cost equation: trade -ANSWER-OC(A) = B/A
, Terms of trade -ANSWER-the ratio at which a country can trade its
exports for imports from other countries
Daniel Ricardo -ANSWER-invented the theory of comparative
advantage
Karl Marx -ANSWER-wrote Das Kapital, the father of communism
Adam Smith -ANSWER-Wrote "the Wealth of Nations" in 1776 and
created the Theory of the Invisible Hand (market responds to price
signals) and adopted the division of labour and absolute advantage
Alfred Marshall -ANSWER-supply and demand analysis, credited for
creating the supply-demand model
Movements along the demand curve -ANSWER-changes in price
cause a change in Qd
Demand curve -ANSWER-marginal benefit curve
Movements of the demand curve -ANSWER-change in demand due to
changes in the no. Of consumers, tastes, incomes, price of
complements, price of substitutes, price expectations (#ticspc)
Normal good -ANSWER-all things equal, an increase in income would
lead to an increase in demand for the good
Inferior good -ANSWER-all things equal, an increase in income would
lead to a decrease in demand for the good
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