1.1.1 - 1.1.3

Question 1

Ceteris paribus.

Answer 1

All other things remain equal.

Question 2

Economic agents.

Answer 2

The major groups involved in economic activity: Consumers, Producers (businesses) and the government.

Question 3

Normative statement.

Answer 3

Statements that involve value judgments or express personal opinions about what ought to be or what should be. They are not based on factual observation.

The V = Valued judgment

Question 4

Positive statement

Answer 4

Objective statements of fact which can be tested using evidence. This means that it can be verified to be true or false.

Question 5

Social science

Answer 5

When observations are made of human behaviour and then theories are made around these observations.

Question 6

Value judgements

Answer 6

An evaluative statement (based on a normative/subjective statement) of how good or bad a person considers an idea or action is. Economics often need to make value judgements when making economic choices.

Question 7

What is the basic economic problem ?

Answer 7

There are unlimited wants and finite resources.

Question 8

Non-renewable vs Renewable resources.

Answer 8

Renewable resources = naturally replenish
non-renewable resources = Can not replenish.

Renewable:
- Wind energy
- Solar panels
- Hydroelectric

Non-renewable:
- Coal
- Oil
- Gas.

Trees = both as it depends on us whether they do or don’t replenish

Question 9

What is an opportunity cost ?

Answer 9

The value of the next best alternative that is forgone when a decision is made.

Question 10

Land

Answer 10

All natural resources used in production

Question 11

Capital

Answer 11

Money is not economic capital !!!
Man made aid to production

Question 12

Labour

Answer 12

Human resource that is used to produce a good.

Question 13

Enterprise

Answer 13

The person who takes the risk to put all the factors of production together.

Question 14

Opportunity cost

Answer 14

The next best alternative foregone when a decision is made.