Economic Methodology Key Terms

Question 1

Factors of Economics E

Answer 1

Enterprise - Brings everything together, risk taker, involved in production

Question 1

Factors of Economics C

Answer 1

Capital - Machinery, IT Equipment

Question 2

Factors of Economics 1st L

Answer 2

Land - Natural Resources, Raw Materials

Question 3

Factors of Economics 2nd L

Answer 3

Labour to make it

Question 4

Opportunity Cost Definition

Answer 4

The benefit lost of the next best alternative when making a choice

Question 5

The cost of the next best alternative forgone

Answer 5

Opportunity cost

Question 6

Ceteris Paribus

Answer 6

‘All other things being equal’

Question 7

All other things being equal

Answer 7

Ceteris Paribus

Question 8

Social Science

Answer 8

The study of human beings as individuals and groups and how they interact with each other.

Question 9

Marginal Utility

Answer 9

Marginal Utility represents the additional satisfaction gained from consuming one or more of the good.

Question 10

Marginal Utility represents the additional satisfaction gained from consuming one or more of the good.

Answer 10

Marginal Utility

Question 11

Positive Statement

Answer 11

A statement based on -
Fact or empirical evidence
Can be tested

Question 12

A statement based on -
Fact or empirical evidence
Can be tested

Answer 12

Positive Statement

Question 13

Normative Statement

Answer 13

Subjective comments that are difficult to test.

Question 14

Subjective comments that are difficult to test.

Answer 14

Normative Statement

Question 15

PPF

Answer 15

Production Possibility Frontier or Diagram

Question 16

Law of Diminishing Returns

Answer 16

Idea that as more of something is consumed the benefits will proportionally get smaller