Economic methodology Flashcards
1
Q
Opportunity cost
A
next best foregone alternative
2
Q
Shift outward in PPF
A
- Technological improvements.
- Discovery of new resources
- Improvements in education
- Increase immigration
3
Q
Shift Inwards in PPF
A
- Disasters
- Wars
- Global Warming
4
Q
Allocative efficiency
A
when no one can be made better of without making someone else worse off
5
Q
Ceteris Paribus
A
assuming other variables remain constant
6
Q
resource allocation
A
deciding how to use scarce resources
7
Q
positive statement
A
objective
8
Q
normative statement
A
based on value judgement
9
Q
land
A
rent
10
Q
capital
A
interest
11
Q
labour
A
wage
12
Q
entrepeneurship
A
profit
13
Q
economic problem
A
best use of scarce or limited resources
14
Q
rational behaviour
A
people try to make decisions in their self-interest or to maximise its private benefit
15
Q
PPF
A
shows the maximum productive potential of an economy using two goods or services
