1.1.1-1.1.3

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Shola

Cards (18)

Ceteris Paribus 
‘All other things being equal’ meaning other influences are constant to assess the effect of a particular variable
Positive Statements 
Statements based on facts which can be tested to explain the outcome of specific policies.
Normative Statements 
Statements concerned with value judgements often include notions of right or wrong.
The Economic Problem 
There are infinite wants but finite factor resources to satisfy them.
Poverty 
Individuals lack basic life necessities or have low incomes relative to other citizens, which is extreme scarcity.
Opportunity Cost 
The value of the next best alternative forgone.
Marginal Analysis 
Economic decision-making based on the additional benefits and costs of a change in behaviour.
Capital 
Inputs such as machinery, transport equipment and factory buildings.
Capital 
Interest and dividends are the return firms gain from using the capital goods but they forgo the interest that could have been gained from investing in a financial asset.
Enterprise 
An entrepreneur organises production, identifies tasks to be completed and bears the risk of the activity which is important for firms as it provides market opportunities.
Enterprise 
Profit is the return as they recognise income-earning opportunities.
Labour  
Households supply labour for wages but sacrifice their leisure time
Land 
Inputs provided by nature. This includes the land and natural resources that nature provides as raw materials.
Factors of Production 
CELL Capital, Enterprise, Land, Labour
Economic Assumptions 
Ceteris paribus, consumers are rational, perfect competition, markets operate efficiently and consumers have fixed preferences
Constraints
Limits to what we can afford to consume
Entrepreneur 
An individual who seeks to supply products to a market for a return. They often invest their financial capital to take risks associated with a business investment
Value Judgement 
A statement based on opinions or beliefs