1.1.1-1.1.2

Question 1

what is a model?

Answer 1

a theoretical concept that looks at how different variables interact

Question 2

what are the 3 economic agents?

Answer 2

Producers (buisness), consumers, government

Question 3

what is a positive statement

Answer 3

they are objective statements that can be tested and evaluated based on empirical evidence

e.g an increase in the uk minimum wage will lead to higher unemployment

Question 4

what is a normative statement?

Answer 4

they are subjective statements, they carry one or more value judgements about what ought to be.

e.g the government should increase funding for state education to improve overall social welfare

Question 5

what is microeconomics?

Answer 5

the study of economics at the level of the individual firm, industry or consumer/household

Question 6

what is the economic problem?

Answer 6

we have limited resources and unlimited wants and needs