Group 1 Flashcards
Ceteris Parabus
All other factors remain constant
Positive statements
Objective and fact-based look for will and is
Normative statements
Value judgement, they are an opinion look for should or comparing one thing with another
How do value judgements influence society
Different economists may have different judgements from the same stat
Difference between natural and social
Economists cannot conduct scientific experiments, have to make models and develop them from real life scenarios with assumptions
How are peoples views influenced
From positive consequences and moral and political judgements
Purpose of economic activity
To produce goods and service to satisfy needs and wants of consumers. Requires resources to produce output
What is to be produced
Government and private sector face problem, have to consider how much of each good- have to be careful due to opp cost
How should it be produced
How g and s are distributed, looking to maximise profits, look at fop to see cost effective and efficient ways of producing
Who will receive it
This with sufficient purchasing power, those willing and able to buy
What are economic resources
The factors of production-capital, enterprise, land and labour
Capital
Physical, goods used in process, machinery building, the reward is interest from investment
Enterprise
Managerial ability, an entrepreneur is someone who is innovative, takes risks and uses fop. The reward is an incentive to take risks
Land
Natural resources such as oil, coal water- reared is rent
Labour
Human capital, the workforce, the rears are wages
