Theme 1 - Economics

• What kind of statement is objective and made without obvious value judgements?

  A positive statement
• What characterizes a positive statement in terms of value judgements?

  It is made without obvious value judgements
• What is a key characteristic of positive statements regarding proof?

  They can be tested to be proven or disproven
• In what form are positive statements often expressed?

  A hypothesis that can be analysed
• Can statements about the future be positive?

  Yes, if they can be proven or disproven
• A normative statement is one which is subjective and based on opinion, so cannot be proven or disproven. It often includes words such as ought, maybe, unwise, should etc. or says that one action is better than another
• The opportunity cost is the cost of one thing in terms of the next best option which has been given up.
• Factors of production

  Land , labour, enterprise and capital
• The PFF shows the maximum possible combinations of capital and consumer goods that the economy can produce with its current resources and technology.
• A movement along the curve indicates a change in the combination of goods produced: more capital goods are produced and less consumer goods are produced, or vice versa. The same amount of resources are allocated amongst the two goods differently. ● A shift of the curve indicates a change in the productive potential of the economy: more consumer and capital goods can be produced or less consumer and capital goods can be produced. There has been a change in the number of resources and/or the technology available to the country and so their potential output has