Chapter 1 Flashcards
Difference between normative and positive statement
Normative: opinion
Positive: can be proved right or wrong
Define value statement
When deciding what to study in economics
Difference between needs and wants
Needs: must have to survive
Wants: personal want
Define economic welfare
the economic well being of an individual, a group within a society, or an economy
What are the 3 kinds of economies
Planned: by government
Mixed: gov intervention and price mechanism
Market : price mechanism
What are the four factors of production
- Land (rent)
- Labour (wage)
- Capital (interest)
- Entrepreneurship (profit)
What is the role of entrepreneurs
Decision makers of the other factors
Define production
Converting inputs into outputs of goods and services
Define capital good
A good used in the production of other goods or services
Define and give an example of renewable and nonrenewable resources
Renewable: that with management can be renewed e.g timber
Non renewable: scarce and runs out of used e.g timber
What is the fundamental economic problem
Unlimited wants and finite resources
Define opportunity cost
The cost of giving up the next best alternative
What is a PPF micro
Curve depicting the various combinations of two products that can be produced when all available resources are fully employed
Define technical progress
New and better ways of making foods and new techniques for producing more output from scarce resources
Draw a PPF micro
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