1.1.1 - 1.1.3 Economics as a Social Science Flashcards
Positive Statements
Objective statements that can be tested
Ceteris Paribus
All other influencing factors are held constant
Normative Statements
Subjective statements/value judgments that cannot be tested
Economic Problem
Infinite want but finite resources
Factors of Production
Capital: Goods made that are used to supply other products
Enterprise: Organise factors of production and take risks
Land: Natural resources
Labour; Quantity and Quality of human input in production
Capital goods
Used to make consumer goods and services
Non-renewable resources
Finite in supply
Renewable resources
Replaceable if rate of extraction is less than natural rate resource renews
Opportunity cost
Cost of alternative that is given up/forgone when a choice is made