Booklet 1- Economic methodology and the economic problem

• Factors of production: Land, Labour, Capital, Enterprise. The inputs used in production of goods and services to make an economic profit
• Production possibility frontier: a graph that shows the maximum possible combinations of two goods or services that an economy can produce efficiently given its level of tech and resources
• Opportunity goods: the cost of a decision, what has been given up to do something else
• Normative statements: statements that express value judgment about what is right or wrong. based on opinion or preference
• Positive statements: Statements that are true or false. can be verified using evidence
• Free goods: useful resources that aren’t scarce and don’t get used up in production therefore having 0 economic value and 0 opportunity costs.
• economic goods: produced using scarce resources.(can benefit society)
• Consumer goods: products and services that are purchased by individuals for satisfaction of wants and needs
• Capital goods: physical goods used to produce other goods and services