what is the difference between a positive and normative statement?
Positive statements are objective and can be measured with factual evidence whereas normative statements are value judgements, they are subjective and based on opinion
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what is the basic economic problem?
Scarcity, wants are unlimited, resources are finite
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what is an opportunity cost?
the opportunity cost is the value of the next best alternative
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what are the four factors of production?
Land, Labour, Capital and Enterprise
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what is the difference between renewable and non renewable?
renewable resources can be replenished, non renewable cannot.
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what do production possibility frontiers show?
the depict the maximum productive potential of an economy using a combination of two goods or services when resources are fully and effectively employed, shows the opportunity cost of producing each product
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how can the PPF show economic growth?
by an outward shift
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what is a capital good?
goods which can be used to produce other goods such as machinery
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what is a consumer good?
goods which cannot be used to produce other goods such as clothing
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what is specialisation?
occurs when each worker completes a specific task in a production process, famously stated by Adam Smith who showed through the division of labour worker productivity can increase
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what are the advantages of specialisation?
higher output and higher quality
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Other cards in this set
Card 2
Front
what can economists not do?
Back
conduct scientific experiments
Card 3
Front
what is the difference between a positive and normative statement?
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