Unit 2

Question 1

Positive economics

Answer 1

Economic statements that are factual

Question 2

Normative economics

Answer 2

Economic statements that invoice value judgements (“we would like”)

Question 3

Society’s Economizing Problem (CELL)

Answer 3

Capital
Entrepreneurial ability
Land
Labor

Question 4

Micro

Answer 4

Study of the individual consumer, firm, or market

Question 5

Macro

Answer 5

Study of the entire economy or a major aggregate of the economy