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A-Level Economics > Economic Methodology 4.1 > Flashcards

Economic Methodology 4.1 Flashcards

1
Q

Positive Statement

A

They are objective statements that can be tested, amended or Rejected by referring to available evidance

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2
Q

Normative Statement

A

They are subjective statements e.g. hey carry value judgement about what ought to be

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3
Q

State the types of agents

A
  • Rational consumers
  • Producers/ Firms (Businesses)
  • Government
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4
Q

Rational consumers

A

Wish to maximise their satisfaction/ welfare or utility from consumption by correctly choosing how to spend there limited income

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5
Q

Producers/ Firms (Businesses)

A

Wish to maximise profits by producing at lowest cost the goods and services that are desired by customers

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6
Q

Government

A

Wish to improve the economic and social welfare of citizens

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7
Q

Types of Economics

A
  • Free market Economy
  • Command Economy
  • Mixed Economy
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8
Q

What is a Free Market Economy

A

It is an economic system based on supply and demand with little r no government control

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9
Q

Example of places with FreeMarket Economy

A

UK, US, EU, Japan

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10
Q

What is a Command Economy

A

It is when the centralised government controls the means of production and determines output levels

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11
Q

Examples of Command Economy

A

China, Russia, Cuba

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12
Q

What is a Mixed Economy

A

It is an Economy organised with some free market elements and some socialistic elements

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13
Q

Examples of Mixed Economy

A

Most countries are mixed economies

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14
Q

What are Microeconomics

A

The study of economics at the level of the individual firm, industry or consumer.

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15
Q

How can micro economics be study

A

Can be studied by How prices and wages are determined in markets also by how consumers decide what to buy

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16
Q

What are some examples of microeconomics

A

Some are Market failure in health care and price discrimination in air line tickets

17
Q

What are Free Marketers

A

Is when some people believe the market forces should allocate resources in society

18
Q

What are Interventionists

A

Is when others believe that governments should have a more prominent role in allocating resources within society

19
Q

What are opportunity costs

A

Opportunity cost measures the cost of a choice made in terms of the next best alternative foregone or sacrificed

20
Q

Example of opportunity costs

A

When the government spends £10 billion on the NHS when the £10 billion could have been spent on National defence and Education

21
Q

What are the factors of production

A

Land
Labour
Capital
Enterprise

22
Q

What is the role of the state in a mixed economy

A

State Owned industries - Businesses wholly or part state owned
Welfare state - Broad range of welfare benefits, Universal and means tested
Government spending on public services - Spending on Education nd health care, Capital spending on infrastructure

23
Q

What are the different ways of Rationing Scarce resources

A
  • Market price
  • Consumer Income
  • Assessment of needs
  • Household postcode
  • Education level
  • Age
  • Gender
  • Nationality
24
Q

What are capital goods

A

Goods that are used to make consumer goods and services, Capital inputs include fixed plant machinery, hardware, software, new factories and other buildings

25
Q

Consumer goods and services

A

Goods and services which satisfy our needs and wants directly

26
Q

What are the advantages of free market competition

A
  • An efficient allocation f scarce recourses, recourses tend to go where the market returns are highest
  • Competitive prices for consumers and suppliers look to increase and protect their market share oath
  • Competition drives innovation and invention in markets which can bring higher profits for businesses and better products for consumers wants and needs
27
Q

What are the 3 sub divisions for the consumer goods

A
  • Consumer durables
  • Consumer non durables
  • Consumer services
28
Q

What are consumer durables

A

Products that provide a steady flow of satisfaction/ utility over their working life

29
Q

What are Consumer non durables

A

Products that are used up in the act of consumption

30
Q

What are consumer services

A

Hair cut, ticket to oasis

A-Level Economics (3 decks)

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