micro starter

Question 1

Define ceteris paribus

Answer 1

looking at the relationship between two variables whilst holding all other variables constant

Question 2

Give 2 examples of positive statements

Answer 2

the unemployment rate is 7%

Question 3

Give 2 examples of normative statements

Answer 3

the government should give more finance to students

Question 4

Define opportunity cost

Answer 4

the option sacrificed when making a decision

Question 5

Write a definition of the term trade-off

Answer 5

Opportunity cost is the cost of the next best alternative, however there may be a range of alternatives all of which have been given up. All of these alternatives are referred to as ‘trade-offs’

Question 6

Define ceteris paribus

Answer 6

looking at the relationship between two variables whilst holding all other variables constant

Question 7

Give 2 examples of positive statements

Answer 7

the unemployment rate is 7%

Question 8

Give 2 examples of normative statements

Answer 8

the government should give more finance to students

Question 9

Define opportunity cost

Answer 9

the option sacrificed when making a decision