Dr.

Ehab Nadim

True or False
1- Tax rate increased in Egypt this is a normative statement. False (Normative & Positive) Correction: Tax rate increased in Egypt this is a positive statement Positive: factually economic or descriptive economy (facts) Normative: Analyses & Decision, point of view, prescriptive economy 2- Fuel price is increasing this macro economy False (Macro & Micro) Correction: Fuel price is increasing this micro economy Macro: cover all the economy like (inflation, price of all products, goods or services for the normal people) Micro: cover sector or part of the economy like (oil price) 3- Needs is basic but wants not basic True (needs & Wants) Needs: are basic & essential requirements to survive (to keep people alive) substance level (Biological needs) Wants: Social needs (requirements) not basic or essential it is the key or area for the economic problem and its the area of profit for the companies (business), so the economic problem ca not be solved 4- Poor and reach counters face the economic problem True (scarcity of resources) Economic problem facing everybody rich or poor which cannot solve this problem 5- The economic are about selling and buying or about demand & supply True The economic has two sides a) Limited resource (Supply side) B) Needs & wants (Demand side)

6- Money is one of the factor of production False (Capital , Labor, Land) Correction: Land, Labor and capital are the factors of production Land: (Natural) all natural recourses (oil, mineral, sea water, forests,) Labor: (people) all human recourses Capital: (physical assets) all manmade (equipment, machines,) Money is not assets (capital) because it is converted to factors of production 7- Product A and product B are substitute goods, when the price of A increases the demand of B decrease. False (Substitute & Complimentary) Correction: Product A and product B are substitute goods, when the price of A increases the demand of B increase. Substitute: (commutative) when it satisfy the same needs or wants like (tea or coffee) Complementary: I cannot take the benefit from one without the presence of the other like (tea & sugar) 8- This question is related to Market definition The market definition: Its (way, environment, mechanism, media) through which buyers and sellers interact to exchange goods and services.