economic methodoloy and the economic problem

Question 1

What is a key assumption made by economist

Answer 1

Ceteris paribus

Question 2

What type is positive objective

Answer 2

Positive statments are objective

Question 3

What makes positive statement positive.

Answer 3

They can be tested with factual evidence and can be rejected or accepted.

Question 4

What sort of words should u look out for in a postive statment.

Answer 4

‘will’ and ‘is’

Question 5

what type is value judgements

Answer 5

They are using normative statement

Question 6

What makes a Value judgement normative

Answer 6

These are subjective and based on opions rather than factual evidence.

Question 7

what words should you look out for in a normative statement

Answer 7

‘should’

Question 8

how does natural sciences differ from economics

Answer 8

Economicst can not carry out scientific investigatio but can use real-life scenarios to build up the models

Question 9

can value judgement influence the decision making and policy
?

Answer 9

Yes because different economisat can infer different judgements from the same statistic

Question 10

what is the purpose of economic activity

Answer 10

the economic activity is to produce goods and services which satisfy consumer needs and wants.

Question 11

who decides what is to be produced in the economiy?

Answer 11

the government and private sectar is faced with this problem.

Question 12

how it is to be produced and how does it impact them

Answer 12

firms produce goods and services.They aim to minimise costs and maximise profits,so they may need to think about production costs and how productive it is.

Question 13

Who will benefit from the goods and services produced and how does it affect them?

Answer 13

consumers who have purchasing power can benefit from the goods and services.Those are willing and able to pay the price charged for a good or service will get the good or service

Question 14

what is captial for

Answer 14

“used for physical:goods,which can be used in factories in production.

Question 15

what is entrepreneurship

Answer 15

Taked managerial ability.It is someoe who can take risks, innovates and uses the factors of production.

Question 16

What is the reward for entrepreneurship

Answer 16

profit and an incentive to take risks

Question 17

What is land

Answer 17

Natural resources oil,water,wheat etc.

Question 18

what is labour

Answer 18

Human capital,which is workforce of the economy

Question 19

factors of production

Answer 19

capital,enterprise,land,labour

Question 20

Whyis the environment scarce resourse.

Answer 20

there is limited energy and natural resources from the earth.to get renewable.

Question 21

what is renewable resources

Answer 21

renewable resources can be replenished, so the stock level of oxygen can be maintained over a period of time.

Question 22

How may the stock decline in the future.If the resource is consummed

Answer 22

if the resource is consummed alot to prevent stock decline it can be managed by preventing or limiting deforstation

Question 23

what is opportunity cost

Answer 23

opportunity cost is the next bestalternative forgone.

Question 24

what are the economic agents

Answer 24

-producers
-households
-governments

Question 25

What is the production possibility frontiers(PPFs)

Answer 25

Production possibility frontiers (PPFs) depict the maximum productive potential of an economy,using a combination of two goods or services,when resources are fully and efficiently employed.

Question 26

What happens to points A and B which is at the frontier?

Answer 26

Producing at points A and B are the most efficient combinations of output on the PPF.

Question 27

Explain the law of diminishing returns in terms of good A and good B

Answer 27

The law of diminishing return states that the opportunity cost of producing more good A increases ,in terms of the lost units of good B that could have been produced.

Question 28

What happens to points D and C which is under the frontier?

Answer 28

It is inefficient to produce at C or D.Resources are not used to their full productive potential.This is because there is an unemplpoyment of econmics resources.

Question 29

How can the PPF showcase economic growth

Answer 29

Production under the curve and on are attainable but outside the PPF is not obtainable.The expansion from an inner curve to an outward curve shows economic growth.

Question 30

How can the PPF showcase a decline in economic growth

Answer 30

the ppf will be an inwars shift to show a decline in the economy.

Question 31

What could cause the the PPF to expand outwards.

Answer 31

-An increase in quality or quantity can shift the ppf curve outwards.
-This leads to increased productive capacity of the economy
-This can be achieved using supply side policies

Question 32

Explain moving along the PPF curve

Answer 32

-Uses the same number of resources and state of resources

-This incurs an opportunity cost

Question 33

What do u call ‘goods which can be used to produce othergoods such as machinery’

Answer 33

Capital goods

Question 34

What do you call ‘goods which cannot be used to produce other goods such as clothing ‘

Answer 34

Consumer goods

Question 35

What is productively efficient

Answer 35

This is when the resources are used to its full capaccity on the PPF.

Question 36

can more than one points be allocative efficient

Answer 36

no this is because more of one good cannot be produced without reducing the amount of the other product available.

Question 37

define allocative efficiency

Answer 37

is when no one can be made better off without making someone worse off.Another name for this is pareto efficiency.This maximises the social welfare of society.

Question 38

what is the main difference between productive efficiency and allocative efficiency

Answer 38

.productive efficiency focuses on cost, while allocative efficiency focuses on consumer satisfaction

Question 39

What assumption are made about the PPF

Answer 39

-Has fixed resources
-a given level of technology
-full resource utilisation

Question 40

Economic decision making and policies are influenced by value judgements because….

Answer 40

They involve moral and political considerations as well as psoitive analysis