Micro 1-2 Flashcards
(14 cards)
Fundamental Economic Problem
Limited resources but unlimited needs and wants, so problem is how to distribute the resources.
Opportunity Cost
Cost of the next best option forgone when making an economic decision.
Economic Activity
Providing goods and services to meet needs and wants.
Scarcity
The limited availability of a resource in respect to its demand.
Social Science
Something aiming to observe the world and make testable hypotheses based on the observations (science) but that studies people and their behaviour (social).
Value Judgement
Judgement based on the values someone holds, conclusion is subjective (e.g. good/bad).
What methods are used by economists
Testing (not controlled as so many factors).
Models of the world
Facts and figures
Subjectivity
Aims of scientific investigation
Discover more about the world, observe the world to construct models.
Issues with investigating like a natural scientist in economics
No controlled testing, often studies can’t be repeated.
3 key differences between positive and normative statements
Positive - objective, falsifiable, evidence-based
Normative - subjective, unfalsifiable, value-based.
Authoritarianism key features
Obedience Force Strong Government Often no voting or rights Government may have significant say over markets
Libertarianism key features
Freedom
Individuality
Often low taxes and redistribution
Often little government intervention in markets
Utilitarianism key features
Maximise pleasure and minimise pain
Group > individual
Significant taxing and redistribution
Significant government intervention in markets
Egalitarianism key features
Equity
High tax and redistribution
Group > individual
Government intervention in markets
