Intro to the Class Flashcards
Cereris Peribus
A shorthand indication of the effect one economic variable has on another, provided all other variables remain the same.
Labour (Human Capital)
Human resources used in production, includes physical and mental contribution.
Land (Natural Capital)
All resources provided by nature to produce goods. Includes soil, and anything under land (oil, minerals, elements, and water).
Capital (Physical Capital)
Anything made by a human and used to produce goods and services.
Entrepreneurship (Management)
Organization of all factors to produce foods , use personal or investor money to buy capital (make investment) in hopes of making profit.
Positive Economy
Describe and analyze economic relationships.
Normative Economy
Focus on how things should be.
Positive Statement
Factual and objective claims that use logic to form hypothesis and utilize empirical evidence.
Normative Statement
Opinion-based claims that cannot be false or true as they are based on subjective judgement.
Why can positive statements be misleading?
Can contain normative assumptions.
Why can government policies be biased if they are using positive economic theories?
Still heavily influenced by their values and ideological objectives as politicians have certain viewpoints.
Scarcity
Humans have unlimited wants but finite resources as the earth is a closed system.
Opportunity Cost
Refers to the next best thing that is given up when a choice is made.
Efficiency
A measure of the output of a product and the amount of resources it utilizes vs the maximum output with the least possible resources utilized.
Choice
The ability of a consumer or producer to decide which good, service or resource to purchase or provide from a range of possible options.
