1.1 The Nature Of Economics Flashcards
What is the significance of the term ceteris paribus.
When one variable change’s all the others stay the same.
What is a positive statement?
One that came be tested as it is not based on a value judgement.
What is a normative statement?
One that cannot be tested as it is based on a value judgement.
What’s does a Production Possiblity Frontier show?
That on the line is a sustainable rate of production and inside it is under production but above it is overproduction and unsustainable.
What is specialisation?
Getting workers to carry out specific tasks in order to increase productivity rates and quality.
What is an advantage of division in labour and specialisation?
The rate of production and quality of good will increase and it will be cheaper.
What is a disadvantage of division in labour and specialisation?
That there is an increase in likelyhood of employees becoming more bored and less motivated.
What are the 4 function of money?
Medium of exchange
Measure of value
Standard to deferred payment
Store of value
What is a command economy?
An economy that is controlled by the government and individuals have little to no say.
What is a free market economy?
A self regulated economy that runs on the laws of supply and demand.
What is and advantage of a command economy?
There is an increase in equality.
What is an advantage of a free market?
It has no government intervention so there is less overproduction.
What is a disadvantage of a command economy?
The community have little to no say in any economic decisions.
What is a disadvantage of a free market?
It can increase inequality due to uneven distribution of money.
