Economic Methodology & Economic Problem Flashcards
1
Q
Factors of production
A
Labour Land Capital Resources (renewable & un-renewable) Enterprise
2
Q
What does a ppf show?
A
Maximum possible output combinations of 2 goods/services an economy can achieve
3
Q
Opportunity cost
A
Number of lost units of good Y due to expansion of good X
4
Q
When will PPF shift outwards?
A
- Improved productivity
- Advances in technology
- Discovery of new natural resources
5
Q
When will a PPF shift inwards?
A
- natural disasters
- war
- migration
- long term fall in productivity (labour)
6
Q
Positive statement
A
- Objective
* can be tested
7
Q
Normative statement
A
- subjective
* mainly opinions
8
Q
Specialisation
A
Concentrating on/producing a certain task
9
Q
Benefits of specialisation
A
- higher output
- variety of products
- bigger market
10
Q
Division of labour
A
Production is broken down Init many tasks
11
Q
Benefits of production of labour
A
- Raises output per person
- lower cost per unit
- more skilled workers(faster)
12
Q
Limitations of division of labour
A
- Lowers motivation
- boring
- less pride taken in work
