Nature of Economics 1.1 Flashcards
1
Q
What is a Positive Statement?
A
Statement based on evidence and factual information; can be proven or disproven
1
Q
What is a Normative Statement?
A
Statement based on opinion; can be proven or disproven
2
Q
What is the basic Economic Problem?
A
There are finite resources but infinite wants
3
Q
What is opportunity cost?
A
The cost of choosing one thing in terms of the next best option
4
Q
What are the four factors of production?
A
Land, Labour, Capital, Entrepreneurship
5
Q
What do PPF show?
A
The maximum combinations of capital and consumer goods an economy can make with its current resources and technology
6
Q
What is specialisation?
A
The production of a specific type of good
7
Q
What is Division of Labour?
A
When labour is specialised in different parts of the production process
