MICRO - Unit 1 Flashcards
What is a positive statement?
is something which can be measured and tested
What is a normative statement?
is an opinion
What is a need ?
something that humans require to survive
What is a want?
something which isn’t essential for survival but people feel that it would improve their standard of living.
What is scarcity?
the lack of resources
What is a free market economy?
is one where firms decide what goods and services to produce with limited intervention from the government.
What are the 4 factors of production?
- Land
- Labour
- Enterprise
- Capital
What is meant by land?
the natural resources which are available for production e.g wood
What is meant by labour?
the human input into the production process
What is meant by capital?
goods used in the supply of other products e.g. tech, machines
What is meant by enterprise?
entrepreneurs which organise the factors of production and take risks
What is human capital?
the value of a worker
What is economic welfare?
refers to the standard of living or general well being of individuals in society
What is opportunity cost?
the benefit of the lost of the next best alternative when making a choice
What are trade-offs?
arises when having more of one thing which results in having less of another