Ceteris paribus assumes other variables remain constant. It is latin for"all other things being remaining the same".
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What is a social science?
The study of societies and human behaviour using a variety of methods, including the scientific method.
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What is normative economics?
The study and presentation of policy prescriptions involving value judgements about the way in which scarce resources are allocated
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What is positive economics?
The scientific or objective study of the allocation of resources
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What is a normative statement?
A statement which cannot be supported or refuted because it is a value judgement
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What is a positive statement?
A statement which can be supported or refuted by evidence
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What is the basic economic problem?
Resources have to be allocated between competing uses because wants are infinite whilst resources are scarce
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What are economic goods?
Goods that are scarce because their use has an opportunity cost
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What is a free good?
Goods that are unlimited in supply and which therfore have no opportunity cost
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What is a non-renewable resource?
Resources, such as coal or oil, which once exploited cannot be replaced
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What is a renewable resource?
Resources, such as fish stocks or forests, that can be exploited over and over again because they have the potential to renew themselves
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What is opportunity cost?
The benefits forgone of the next best alternative. e.g. for consumers, opportunity cost is what has to be given up when spending on an item. for instance the opportunity cost of buying a chocolate bar might be 2 packets of crisps
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What is the PPF curve?
A curve which shows the maximum potential level of output of one good given a level of output for all other goods in the economy. It helps economists to analyse trade-offs
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What effect would economic growth (an increase in the productive potential of the country) have on the PPF curve?
It would cause an outward shift in the PPF.
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What are capital goods?
Goods that are used in the production of other goods such as factories, offices, roads, machines and equipment
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What are consumer goods?
Goods and services that are used by people to satisfy their needs and wants
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Give 5 key characteristics of free market economies?
Non equality-people earn money through work/ The resources are allocated through the market/ Private ownership of everything/ Rich/poor divide/ Reward for those who work hardest
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Give 5 key characteristics of command (planned) economies?
Equality/ Government controls resources/ You do not have private ownership of everything/ Lack of competition/ Lack of motivation
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Other cards in this set
Card 2
Front
What is a social science?
Back
The study of societies and human behaviour using a variety of methods, including the scientific method.
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