Economics as a social science Flashcards
What is economics?
It is concerned with the ways in which societies organise scarce productive resources in order to statisfy peoples wants.
What is ceteris paribus?
Means that when the effect of change is considered it is assumed that all other variables are held constant
Why is it impossible to make scientific experiments?
Because economics is a social science involving people
What are positive economic statements?
Are objective statements based on evidence or facts that can be proved or disproved,
What are normative economic statements?
Are subjective statements based on value judgements and cannot be proved or disproved.
What is scarcity?
Exists because resources are finite while wants are infinite.
What are the 3 economic questions?
What to produce
How to produce
For whom to produce
What are the 4 factors of production?
Capital: man made aid to production
Enterprise: bringing together the other FOPs and taking risks in production
Land: natural resources
Labour: human effort both physical and mental
What are renewable resources?
Are those whose stock levels can be maintained at a certain level
What are non renewable resources?
Are those that will eventually be completely depleted
What is opportunity cost?
It is the next best alternative that is forgone when a choice is made
What are economic goods?
Created from resources which are limited in supply and so are scarce and they command a price.
What are free goods?
They are unlimited in supply and have the opportunity cost of 0 since consumption by one person does not limit the consumption of others
