econ

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• o[%3EnCj`L Basic economics theme 1::1.1.1 What is the process of developing models in economics? "Economists try to understand the economy through making assumptions to help them create modelsThe scientist puts forward a hypothesis which is capable of refutation (prove something to be false or incorrect by providing evidence or logical argument)
• Gathers evidence to either support the theory or refute it
• Accepts, modifies or refutes the theory."
• hdUPXr-F4u Basic economics theme 1::1.1.1 How is the ceteris paribus assumption utilised in building economic models? "The majority of the models used in Economics assume that all things remain equal.Isolates the effect of a specific variable while keeping all other relevant factors constantThis simplification helps researchers focus on understanding how change...
• BHL=4eb9Xf Basic economics theme 1::1.1.2 "
• Distinction between positive and normative economic
• " "Normative statement- a statement which cannot be supported or refuted because it is a value judgement.
• Positive statement - a statement which can be supported or refuted by evidence, objective"
• y,/kKNPB~2 Basic economics theme 1::1.1.2 "
• The role of value judgements in influencing economic
• decision making and policy
• " "Economic decisions often involve choices influenced by individual or societal valuesPolicies such as taxation, subsidies, and regulations are shaped by value judgments.Policymakers may align their decisions with prevailing values to gain public support."
• ux/W:qK+87 Basic economics theme 1::1.1.1 The purpose of modelling  we construct theories or models because we want to know why something is as it is, we use theories and models all the time in deciding how to act.
• PESzD2.$w4 Basic economics theme 1::1.1.1 Economics - the science  Economics is the social science that examines how individuals, businesses, governments, and societies allocate resources and make choices to satisfy their needs and wants.
• o!oZ^orBsN Basic economics theme 1::1.1.3 "
• The problem of scarcity
• " "Resources are scarce, however wants are unlimited. This is a problem due to the fact that there are finite resources and therefore not all wants can be satisfieddecisions need to be made what, how and for whom goods and services are produced"
• PTKR&2B^lP Basic economics theme 1::1.1.3 "
• The distinction between renewable and non-renewable
• " "Renewable resources are those that are being replaced the same or faster than they are being consumed. For example, solar energy would be classed as renewable due to the fact that it can be used without the effect of it running out.non-renewable resources which are being consumed faster than they’re being replaced by natural means. An example of this may be oil or coal which is both being consumed faster than they’re being replaced. This is especially the case due to ...
• h.i5%tsfDg Basic economics theme 1::1.1.3 "
• The importance of opportunity costs to economic agents (consumers, producers and government)
• " "when the government are allocating their budgets on different resources e.g. an increase in spending on health may leave them with less money to spend on education. The opportunity cost is the reduction on education and the costs that are associated with this e.g. a reduction in the quality of the labour forceConsumers experience opportunity cost with every decision that they make. For example, should a cons...
• dEqM,=NUWN Basic economics theme 1::1.1.5 "
• Specialisation and the division of labour: reference to
• Adam Smith
• " Adam Smith was a key economist during the 1700s and was best known for his book, the wealth of nations. Specialisation occurs when a country/business decides to focus on making a particular good/service. The division of labour occurs when the production process of a good is broken down in to various small tasks. Adam Smith argued that through specialisation and the division of labour production could be increased and extra wealth could be created. This is due to the fact that specialisation results in an increase in productivity due ...
• IDv~f&Zs0% Basic economics theme 1::1.1.5 "
• The advantages and disadvantages of specialisation and
• the division of labour in organising production
• " "Advantages - Increased output – As a result of the repetitive nature of specialisation it means that workers develop greater skill in performing their particular task. As a result of this, workers are able to produce more goods in the same amount of time when specialisation and the division of labour take place.Less wastage – As workers become more skilled at their particular task they make less mistakes as well as less time thus increasing efficiency and reducing wastage.<span style=""background-color: rgb(...
• n@ybD^?_To Basic economics theme 1::1.1.5 "
• The advantages and disadvantages of specialising in the production of goods and services to trade
• " "Advantages - Greater output – As a result of countries specialising in certain goods/service output increases. This is due to the fact that by focusing on certain goods/services it allows businesses to become better at producing them and therefore they’re able to produce in greater quantities. This will cause unit costs to decrease thus increasing consumer surplus and the prices of goods/services decrease.Economic growth – Specialisation also allows greater quantities of goods to be produced and therefore increa...
• e8;=8B~{ki Basic economics theme 1::1.1.5 "
• The functions of money -  a medium of exchange