Economic Methodology And Ecomonic Problem Flashcards
1
Q
Positive statement
A
Objective
Can be tested
2
Q
Normative statements
A
Based on value judgements
Subjective and based on opinion
3
Q
What is Entrepreneurship
A
Managerial ability
Take risks and innovates
4
Q
What’s meant by a renewable resource
A
Rate of consumption is less than the rate of replenishment
5
Q
What is opportunity cost
A
The value of the next best alternative foregone
6
Q
Law of diminishing returns
A
Opportunity cost of producing one good increases in terms of lost units of another good on PPF
7
Q
What is full productive potential
A
Any point along the PPF
8
Q
What is allocative efficiency
A
When scarce resources are used to make goods and services that meet the demands and desires of society
