TOPIC 1 - NATURE OF ECONOMICS AND MARKETS Flashcards
WHAT DOES CETERIS PARIBUS MEAN?
ALL OTHER THINGS BEING EQUAL.
WHAT ARE POSITIVE STATEMENTS?
POSITIVE STATEMENTS ARE OBJECTIVE AND CAN BE TESTED IN EXPERIMENTS.
WHAT ARE NORMATIVE STATEMENTS?
NORMATIVE STATEMENTS ARE SUBJECTIVE AND CANNOT BE PROVEN OR DISPROVEN.
ETHICAL VALUE BASED JUDGEMENTS.
WHAT IS THE ECONOMIC PROBLEM AND HOW CAN IT BE SOLVED?
THE QUESTION OF HOW SCARCE RESOURCES CAN BE ALLOCATED TO SATISFY UNLIMITED WANTS.
CAN BE SOLVED BY QUEUING AND THE ABILITY TO PAY
WHAT ARE THE FACTORS OF PRODUCTION?
CAPITAL
ENTERPRISE
LAND
LABOUR
WHAT IS CAPITAL?
GOODS USED TO PRODUCE CONSUMER GOODS.
WHAT IS ENTERPRISE?
PEOPLE THAT INVEST, INNOVATE AND ORGANISE OTHER FACTORS OF PRODUCTION.
WHAT IS LAND?
NATURAL RESOURCES.
WHAT IS LABOUR?
HUMAN INPUT INTO PRODUCTION PROCESS.
WHAT IS AN OPPORTUNITY COST?
THE COST OF GIVING UP THE NEXT BEST ALTERNATIVE BY MAKING A CHOICE.
WHAT IS A FREE GOOD?
RESOURCES WITH NO OPPORTUNITY COST
WHAT IS AN EXAMPLE OF A FREE GOOD?
BREATHING AIR
WHAT IS A RENEWABLE RESOURCE?
RESOURCES WITH STOCK LEVEL THAT IS NATURALLY REPLENISHED E.G WOOD
WHAT IS A NON RENEWABLE RESOURCE?
RESOURCES WITH STOCK LEVEL THAT DECREASES OVER TIME AS IT IS CONSUMED E.G FOSSIL FUELS.
WHY IS PPF CURVED?
NOT ALL FACTORS OF PRODUCTION ARE EQUALLY SUITED TO PRODUCTION OF DIFFERENT GOOD.
CAUSES A CHANGING OPPORTUNITY COST.
WHAT IS THE PRODUCTION POSSIBILITY FRONTIER?
REPRESENTS THE MAXIMUM CONBINATIONS OF GOODS AND SERVICES THAT CAN BE PRODUCED IN A GIVEN PERIOD OF TIME WITH AVAILABLE RESOURCES.
REPRESENTS MAXIMUM PRODUCTIVE POTENTIAL OF AN ECONOMY.
WHAT ARE REASONS FOR THE OUTWARD SHIFT OF PPF?
IMMIGRATION
EDUCATION AND TRAINING
HIGHER RETIREMENT AGE
INCREASED PARTICIPATION RATE
BUSINESS START UP GRANTS
IMPROVED HEALTHCARE
RECOVERED LAND
INCREASED COMPETITION
WHAT ARE REASONS FOR THE INWARD SHIFT OF PPF?
NATURAL DISASTERS
WARS
DECLINING BIRTH RATE
RISING SEA LEVELS
DE - SKILLING
EMIGRATION
INCREASED REGULATION
WHAT ARE ECONOMIC GOODS?
RESOURCES THAT ARE SCARCE.
