Economic methodology Flashcards

1
Q

Define mAcroeconomics

A

The study of an economy or a group of economies

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2
Q

Define mIcroeconomics

A

The study of individual markets (households and firms)

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3
Q

Why is economics a social science?

A

Science: Define problem to be investigated > Put forward a theory > Investigate the theory > Accept or reject the theory

Social: Looks at human behaviour

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4
Q

Define Positive Statements:

A

Statement that is based on facts or actual evidence

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5
Q

Define Normative Statements:

A

Statement that is based on economist’s opinion or value added judgement and which cannot be proven

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6
Q

What is ceteris paribus?

A

Ceteris paribus is the Latin phrase meaning other things equal or all other things held constant or unchanged.
It is used to help consider the effects of one change at a time

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7
Q

Define short run

A

Time period when a firm can change at least one but not all factors of production eg. labour

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8
Q

Define long run

A

Time period when all factors of production are changed

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9
Q

Define very long run

A

Time period when all key inputs into production are variable, such as technology, government regulation and social concerns

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