Lecture 1 - scarcity + basics

Question 1

What is scarcity?

Answer 1

The process of having limited goods and services.

Question 2

What is purposeful behavior?

Answer 2

Humans reflect rational self interest, consumers look to increase utility and firms look to maximize profit.

Question 3

What are marginal costs and marginal benefits?

Answer 3

The process of having a extra or additional cost/benefit due to a economic decision made.

Question 4

What is the definition of positive economics?

Answer 4

When a statement is made without making a judgments e.g. amazon earnings increased by 5%.

Question 5

What is the definition of normative economics?

Answer 5

When a statement is made while making a judgement e.g. government should subsidize higher education.

Question 6

What is ceteris paribus?

Answer 6

When a process is happening causing the relationship between two variables while all other variables are unchanged. ( all else equal )

Question 7

What is ‘causality’?

Answer 7

When an observed action appears to have caused another event or action.

Question 8

What is correlation?

Answer 8

The relationship between two variables.

Question 9

What are the four economic resources? (CELL)

Answer 9

Capital, enterprise, land, labour

Question 10

What are the four criteria applied in judging economic policy?

Answer 10

Efficiency, equity, economic growth, stability.