Economic Methodology

Question 1

Positive statement

Answer 1

A statement that can be scientifically tested to see if it’s correct

Question 2

Normative statement

Answer 2

A statement that includes a value judgement

Question 3

Need

Answer 3

Necessary for human survival

Question 4

Wants

Answer 4

Something desirable

Question 5

Economic welfare

Answer 5

The economic well-being of an individual, group or society in an economy

Question 6

Factors of production

Answer 6

Inputs into the production process such as land labour capital and enterprise

Question 7

Environmental resources

Answer 7

Soil, water, trees, minerals
Gases
Solar and wind energy

Question 8

Fundamental economic problem

Answer 8

Both goods and resources needed to produce goods are scrarce

Question 9

Opportunity cost

Answer 9

The cost of giving up the next best alternative

Question 10

Production possibility frontier

Answer 10

A curve depicting the various combinations of two products that can be produced when all the available resources are fully emplayed

Question 11

Economic growth

Answer 11

The increase in the potential level of real output the economy can produce

Question 12

All points inside the PPF are

Answer 12

Productively inefficient

Question 13

All point on the PPFs are

Answer 13

Productively efficient

Question 14

What economic concepts can be illustrated on the PPFs

Answer 14

Scarcity, choice, opportunity costs, growth and full employment

Question 15

What type of economy is the UK

Answer 15

Mixed