1.1.1 - 1.1.3

Question 1

microeconomics

Answer 1

study of how individuals, households and firms make decisions in markets.

Question 2

macroeconomics

Answer 2

study of how issues affect economies as a whole

Question 3

economic problem

Answer 3

how it is a challenge to satisfy unlimited wants and needs with limited resources

Question 4

ceteris paribus

Answer 4

“assumptions” all other things being equal ; whilst the effects of a change in one variable are being investigated, all other variables are equal.

Question 5

how to create models

Answer 5

research and evidence
theories
models
simplification
assumptions (ceteris paribus)

Question 6

positive statement

Answer 6

facts

Question 7

normative statement

Answer 7

involves a valued judgement about what ought to be

Question 8

positive economics

Answer 8

relies on facts or a situation

Question 9

normative economics

Answer 9

value of economic fairness or what the economy should be

Question 10

marginal analysis

Answer 10

examination of the associated costs and potential benefits of specific business activities or financial decisions.

Question 11

opportunity cost

Answer 11

cost of the next best alternative which is foregone when a choice is made.

Question 12

renewable

Answer 12

resources that can be replenished to replaced the depleted

Question 13

non renewable

Answer 13

resources that cannot be replaced as they are limited in supply

Question 14

sustainable resources

Answer 14

renewable resources that are economically exploited in such a way they are replenished faster than they are consumed