Unit 1 Flashcards
(5 cards)
1
Q
what is a price mechanism?
A
the changing of prices of products and resources in a market economy due to the forces of supply and demand
2
Q
what is a positive statement?
A
claims that attempt to describe the world as it is
3
Q
what is a normative statement?
A
claims that attempt to prescribe how the world should be
4
Q
what is a factor market?
A
A factor market is where businesses buy resources (inputs) they need to produce goods and services. These inputs are called factors of production
5
Q
what are the four factors of production?
A
Land, Labour, Capital and entrepreurship
