Micro economics

• What are the factors of production?

  Land, labour, capital, and enterprise
• What is meant by 'land' in the context of factors of production?

  All the resources found in the natural environment
• How is 'labour' defined in economic terms?

  Human resources
• What does 'capital' refer to in the factors of production?

  Man-made resources, including fixed and circulating capital
• What is 'enterprise' in the context of factors of production?

  The skills involved in combining other factors of production and accepting risk
• What is scarcity in economics?

  The basic economic problem where resources are finite but wants are infinite
• What are the three questions that define the basic economic problem of scarcity?

  What to produce? How to produce it? Who to produce it for?
• What is the central purpose of economic activity?

  To combine scarce resources into goods and services that satisfy human wants
• What does opportunity cost represent?

  The cost of a decision in terms of the next best alternative foregone
• What are goods in economic terms?

  Tangible economic outputs with a physical form
• How are services defined in economics?

  Intangible economic outputs without a physical form
• What are free goods?

  Goods that involve no opportunity cost in production
• What is positive economics?

  A statement of fact or a testable hypothesis
• What is normative economics?

  A statement of opinion or value judgement
• What is social science?

  A science that studies human behaviour, such as economics and psychology
• Why is testing hypotheses in social sciences challenging?

  Because human behaviour lacks predictability and variables cannot be controlled
• What does 'ceteris paribus' mean?

  All other things being equal
• What does a production possibility frontier (PPF) illustrate?

  The maximum possible combinations of output using available resources
• What does an outward shift of the PPF indicate?

  An increase in production possibilities due to more or better resources
• What does an inward shift of the PPF signify?

  A decline in production possibilities due to fewer or less productive resources
• How is demand defined in economics?

  The quantity of a good or service consumers are willing to purchase at a given price
• What is effective demand?

  When the wish to purchase a good or service is supported by the ability to pay
• What are the factors of production?

  Land, labour, capital, and enterprise
• What does 'land' refer to in the context of factors of production?

  All the resources found in the natural environment
• What is meant by 'labour' in economic terms?

  Human resources
• What does 'capital' consist of?

  Man-made resources, including fixed and circulating capital
• What is the role of 'enterprise' in the factors of production?

  The skills involved in combining other factors of production and accepting risk
• What is scarcity in economics?

  The basic economic problem where resources are finite but wants are infinite
• What are the three questions that define the basic economic problem of scarcity?

  What to produce? How to produce it? Who to produce it for?
• What is the central purpose of economic activity?

  To combine scarce resources into goods and services that satisfy human wants
• What does opportunity cost represent?

  The cost of a decision expressed in terms of the next best alternative foregone
• What are goods in economic terms?

  Tangible economic outputs
• What are services in economic terms?

  Intangible economic outputs
• What are free goods?

  Goods that involve no opportunity cost in production
• What is positive economics?

  A positive statement is a statement of fact or a testable hypothesis
• What is normative economics?

  A normative statement is a statement of opinion or value judgement
• What is social science?

  A science that studies human behaviour, such as Economics, Psychology, and Sociology
• What is the challenge in testing hypotheses in social sciences?

  Human behaviour lacks predictability and variables cannot be held constant
• What does 'ceteris paribus' mean?

  All other things being equal
• What does a production possibility frontier (PPF) show?

  The maximum possible combinations of output using available resources