1.1- 1.5 economic methodology and the economic problem Flashcards
1
Q
What is the economic problem?
A
How to best allocate scare resources given unlimited wants and needs
2
Q
What is a positive statement?
A
A statement that can be scientfically tested. eg. can be proven to be true or false
3
Q
What is a normative statement?
A
a statement that is subjective and based on opinion. usually contains a value judgment.
4
Q
What is a value judgment?
A
Wether something is desirable or not
5
Q
what are the factors of production
A
- land
- labour
- capital
- enterprise
6
Q
what does it mean to behave rationally
A
make decisions based on their self interest to maximize their private benefit
7
Q
what does the ppf curve show
A
various combinations of two products which can be produced when all available resources are used efficiently
8
Q
A
