Idk Flashcards
What does ceteris paribus mean?
All other things being equal
What is a positive statement?
A statement that can be supported with evidence and fact
What is a normative statement?
They are value based and involve opinions
What are capital goods?
They are goods that are reinvested back into the business - eg. Machinery
What are consumer goods?
They are the finished products
Often made by capital goods
What is a PPF?
The maximum possible output combinations of 2 goods or services an economy can achieve when all resources are fully used
What are the 4 factors of production?
- capital (technology)
- enterprise
- labour
- land (natural resources)
Name 3 land factors
- natural gas
- diamonds
- lobster fisheries
Name 3 labour factors
- engineers
- cleaning firms
- immigration
Name 2 Capital factors
- tractors
- tech software
name 3 enterprise factors
- modern art
- graphic design
- universities
Why would the production be closer to the axis in a PPF diagram?
Because not all the resources are being fully utilised
Is a point to the right of the PPF attainable?
It can be if we can get more of the 4 FOP
What is the opportunity cost?
How many you give up
What does a PPF show?
It shows the maximum possible output combination of 2 goods or services an economy can achieve when all resources are fully utilised
Who uses consumer goods?
People - to satisfy their needs and wants
What are capital goods used for?
Production of other goods ( factories, offices, roads, machines and equipment )
What is the division of labour?
The specialisation of labour into separate tasks
What does division of labour ensure?
Higher productivity per worker
What is productivity?
Controlling your inputs and maximising your outputs
Positives of specialisation of labour:
- become more skilled
- faster
- more organised
- better sales
Negatives of specialisation of labour:
- boring
- hard to cover
- higher skill level = higher pay
- training and development
What is country specialisation?
When a country specialises its resources into producing a limited range of goods and services
What is absolute advantage?
Being able to produce more of something than another country ( assuming both have the same amount of resources/FOP available )
What is comparative advantage?
Being able to produce something at a much lower opportunity cost than another country
( all FOP = )
Positives of county specialisation:
- make full use of all resources
- increases output
- improves quality
- allows for exports
Negatives of country specialisation:
- what if there’s a world recession?
- risk of over-specialising
- overuse of natural resources
Problems with specialisation :
- recession
- low cost competitors
- risky if everyone works in same industry
