Definitions Flashcards
(9 cards)
A Positive Statement
A statement based on fact and can be scientifically proven to be correct or incorrect.
A Normative Statement
A statement which is based on opinion which cannot be proven scientifically.
Ceteris Paribus
Meaning all factors remain the same.
Opportunity Cost
The cost of giving up the next best option/alternative.
Needs
Wants
A need is something you cant live without.
A want is something that is desirable, could improve the quality of living.
The Key Economic Decisions
What to produce;
how to produce;
for whom to produce.
Factors of Production and Its Rewards
Are resources used by firms to produce goods/services.
Aka factor inputs.
Land, Labour, Capital, Enterprise.
Reward: Rent, Wages, Interest, Profit.
Economic Problem
Scarcity and that is result from limited resources and unlimited wants.
Trade offs
The list of alternatives.
