1. Economic Methodology and the Economic Problem Flashcards

1
Q

What is a Positive Statement?

A

A statement that can be tested against the facts to be declared as true or false

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2
Q

What is a Normative Statement?

A

A subjective opinion

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3
Q

What is Economic Welfare?

A

The standard of living or general well-being of people in society.

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4
Q

What are the four factors of production?

A

Land
Capital
Labour
Enterprise

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5
Q

What is Land? (Factors of Production)

A

Natural resources such as fertile land, minerals, water, etc…

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6
Q

What is Capital? (Factors of Production)

A

Man-made physical equipment to make other goods and services (machinery)

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7
Q

What is Labour? (Factors of Production)

A

People involved in production, sometimes called human capital.

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8
Q

What is Enterprise? (Factors of Production)

A

Individuals who take a business risk to create the good/service using the other 3 factors of production.

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9
Q

What is the basic economic problem?

A

Scarce resources, unlimited wants.

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10
Q

What is an opportunity cost?

A

The cost of the next best alternative that you give up when making a choice

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