1.1 The Nature Of Economics Defenitons

Question	Answer
Ceteris paribus	other things being equal
Positive statement	can be proved and tested
Normative statement	value judgements - subjective
Scarcity	resources are finite, wants are infinite
Factors of production	Land, Labour, Capital, Enterprise
Renewable resources	stock levels can be maintained at a certain level
Non-Renewable resources	those which will eventually be completely depleted
Opportunity cost	something that is forgone
Production Possibility Frontier (PPF)	illustrates the maximum potential output of an economy when all resources are fully employed
Marginal analysis	consideration of the impact small changes make on the current situation
Economic Growth	increase in the productive capacity of the economy indicating a decrease in real output
Economic Decline	decrease in the productive capacity of the economy indicating a decrease in real output.
Division of Labour	when work is split up into small tasks
Free Market Economy	refers to all the buyers and sellers of a product or service who determine its price
Command Economy	resources are allocated by the state
Mixed Market Economy	a free market economy and a command economy

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	Created by Jesse McNab over 6 years ago