Economics Questions and Answers

Consumer preferences and resource scarcity determine which goods are produced and in what quantity; the prices in a market economy act as signals to producers and consumers who use these price signals to help make decisions. Governments play a minor role in the direction of economic activity.

Circulating capital can consist of cash, operating expenses, raw materials, inventory in process, finished goods inventory and accounts receivable.

Circulating capital is frequently referred to as working capital or alternatively, revolving capital.

Opportunity cost is the value of the next best thing you give up whenever you make a decision. It is "the loss of potential gain from other alternatives when one alternative is chosen". it is simply the forgone alternative

If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can't spend the money on something else.

Economics is regarded as a social science because it uses scientific methods to build theories that can help explain the behavior of individuals, groups, and organizations.

A natural resource is what people can use which comes from the natural environment. Examples of natural resources are air, water, wood, oil, wind energy, natural gas, iron, and coal.

Solar energy is man made which has the sun as its basic source of energy.