Economics Methology and Problem

Question 1

What does a social science study?

Answer 1

Society and its interations.

Question 2

How do we decide what should be made assumptions?

Answer 2

Analyse if factor has correlation or causaiton.

Question 3

How to we ensure that Positive Statements have a degree of reliability?

Answer 3

1. Use of logic = Rational agents
2. Social Scientific Method
3. Certeris pariubus Assumption

Question 4

What is the Social Scientific Method?

Answer 4

Question, Hypothesis, Emperical research, analyse data, Conclusion

Question 5

What is Emperical Research?

Answer 5

Relies on observation, experimentation and direct gathering of data to form a conclusion.

Question 6

What is refutation?

Answer 6

The act of proving a statement wrong.

Question 7

How are the main shareholders rational?

Answer 7

Consumer-max untility
Producers-max profit
Workers-balance welfare with work
Gov-interest of public

Question 8

What are positive statements?

Answer 8

A statement that can be proven true or false.

Question 9

What are Normative economics?

Answer 9

Relies on Value judgements.

Question 10

What is a Manifesto?

Answer 10

A statement declaring vlaues, plans and policies or a political party.

Question 11

What are Exmplaes of Value Judgements?

Answer 11

Moral judgements
Equity Vs Equality

Question 12

What is the central purpose of Economics Activity?

Answer 12

To produce gands to satisfy needs and wants.

Question 13

What is included in the central purpose of Economic Activity?

Answer 13

1. Produce
2. Satisfy
3. Add value

Question 14

What does adding value mean?

Answer 14

Process of increasing utility or financial value

Question 15

What is the eocnomic problem?

Answer 15

How to allocate scarce resources to unlimites needs and wants.

Question 16

What are the Fundamental Economic Questions?

Answer 16

1. What to produce?
2. How to Produce?
3. Who gets it?

Question 17

What are the three economic systems? Explain them.

Answer 17

Free market - Allocation due to fore od s and d
Planned - Allocation/resources state owned.
Mixed - Mix

Question 18

How does the free market answer the fundamental questions?

Answer 18

Demanded and supplies - Most efficient and profitable way - Who can affort it.

Question 19

How does planned economy answer the fundamental questions?

Answer 19

Gov decide - Everyone has a job - Everyone.

Question 20

Explain FOP.

Answer 20

Land - Natural resources
Labour - Human input
Capital - Man-made resources
Enterprice - Risk taken in starting and running business.

Question 21

What are finances associated with FOP?

Answer 21

Land - Rent
Labour - Wages
Capital - Investments
Enterprice - Profit

Question 22

How does Scarce reasources effect Main stakeholders?

Answer 22

Consumer - Higher price
Producer - Higher COP
Workers - Less comfy Environment
Gov - Public or private owned, Allocate

Question 23

What is Opportunity Cost?

Answer 23

The loss of the next best alternative when deciding to allocate resources in a particular way.

Question 24

What is a PPD?

Answer 24

A model that considers the max possible production if the economy employs all its FOP to produce only 2 g/s.

Question 25

What are Capital goods?

Answer 25

Assets used to produce an output.

Question 26

What are Consumer goods?

Answer 26

End products with no future productive use.

Question 27

Draw a PPD. With points including impossible ones.

Answer 27

Check.

Question 28

What is productive Efficiency?

Answer 28

Max output made frm available FOP.

Question 29

What is Allocatve Efficiency?

Answer 29

Best possible use of resources that are optimal for society.

Question 30

How many points are there of PE and AE?

Answer 30

PE - on curve AE - one

Question 31

If there an opportunity cost moving from a point inside the curve to one on the curve? What can be a result of this?

Answer 31

No SR economic growth

Question 32

What is economies of scale?

Answer 32

The costs advantages gaines when output is increased.

Question 33

What shifts the PPC curve?

Answer 33

Change in quality and quantity.

Question 34

If there an opportunity cost in moving between two points inside the PPC curve

Answer 34

No.

Question 35

What is another word for opportunity cost?

Answer 35

Trade-off

Question 36

Why is the PPF convex

Answer 36

Law of increasing opportunity cost. As resources shift from one g to another, opportunity cost of additional units increase.

Question 37

What is equity

Answer 37

The quality of being fair