Definitions

Question 1

Ceteris Paribus

Answer 1

All other things remain the same.

Question 2

Normative Statements

Answer 2

Subjective, biased, debatable comments that are difficult to test and are influenced by people’s opinions or prejudices.

Question 3

Positive Statements

Answer 3

Objective, impartial, factually-based comments that can be scientifically tested and are not influenced by people’s opinions or prejudices.

Question 4

Opportunity cost

Answer 4

The value of the benefit forgone of the next best alternative in a decision.

Question 5

Social science

Answer 5

A study of the way that people interact and behave with each other.

Question 6

The basic economic problem

Answer 6

Humans have unlimited wants but resources are scarce.

Question 7

Economic welfare

Answer 7

The benefit gained by individuals, firms, or society in the production of goods and services through the meeting of needs and wants.

Question 8

Economic agents

Answer 8

The individuals and firms that partake in economic activity.

Question 9

Economic activity

Answer 9

The demand for (from consumers) and supply of (from firms) goods and services

Question 10

Needs

Answer 10

Things that are essential to maintain survival.

Question 11

Wants

Answer 11

Things that are desired but not essential to survival.