CHAPTER 2 ECONOMICS ACTIVITIES

Multiple Choice

1. C. Consumption
2. A. Everything done to make or create goods
3. B. Directly satisfy human needs
4. A. The indifference curve is below the budget line
5. C. Satisfy human needs and increase the prosperity
6. D. All activities involved in expediting goods from producers to consumers
7. B. The number of labour is increasing
8. A. Government
9. D. Individuals
10. B. Government makes constitutins and regulations

Essay

1. Explain the definiton of consumption, production, and distribution !
2. Explain the difference between counsumption, production, and distribution !
3. Explain the consumer behaviour with the indifference curve approach !
4. Explain the economic activity circular flow diagram !
5. Explain the role of consumption household and firms consumption !
6. Explain the role of government and society !
7. Explain the role of foreign costumers and producers !
8. Give detail explanation on every economic entities in an economy !
9. Explain the flows formed by the interaction between consumption household and firms consumption !
10. Explain types of incomes received by cosumption households

1. Consumption is the direct usage of goods and services to fulfill one's needs. Production is making goods or providing services. Distibution are all of the goods handling activities starting from the producers all the way to the hands of the costumers.
2. If the consumption to use the goods an service, the production is to produce the goods and service, and the distribution is to distribute all the goods and the services.
3. In maximazing their satisfication, consumers are restrained by their constrained budgets. They cannot reach the highest satisfaction level because their consumption is limited by their budget constraint
4. Circular flow diagram which consists of two-sector and four-sector diagram. Circular flow diagram with two-sector : Two kinds of market are established as a consequence of this interaction between consumption household and firms consumption. The first is product market. In this market, household buy goods and services that produced by firms. The second one is factor market, where firms buy inputs such as labour, capital, andland from households.
5.