MICRO 1 Flashcards
What is the fundamental economic problem?
That individuals in an economy have infinite wants but there are scare resources available.
What is Scarcity?
The state of being in short supply, especially relative to how much something is in demand.
What type of subject is economics?
A social science.
What is economic activity?
When a good or service is provided in order to satisfy the wants or needs of others or yourself
What is Opportunity Cost?
The value of the next best options which is forgone when an economic decision is made.
What is a social science?
Scientific study of human interaction and social relationships
Define a positive statement
An objective, fact based statement which could in principle be shown to be true or false.
Define a normative statement
A subjective statement based upon opinion which cannot be proven or disproved.
What does an authoritarian believe in?
That a single centralized body of power should organise people in order to succeed, with there not being any opposition. (Similar to a dictatorship)
What does an libertarian believe in?
To maximise the political freedom, allowing citizens to do what they want, as long as it doesn’t hurt others.
What does an utilitarian believe in?
That you should always act in a way which increases the amount of good and decreases the amount of bad (always maximising utility).
What does an egalitarian believe in?
That everyone should be treated equally and be given equal opportunities.
