economic methodology and the economic problem (15 Cards)
  Front cards Back cards
1 allocative efficiency when the available economic resources are used to produce the combination of goods and services that best matches people's tastes and preferences.
2 capital good a good which is used in the production of other goods and services.
3 consumer good a good which is consumed by individuals or households to satisfy their needs or wants.
4 economic welfare the economic well being of an individual, or a group within society, or an economy.
5 factors of production inputs into the production process, land, capital and enterprise
6 full employment when all those who are able and willing to work are employed.
7 fundamental economic problem how best to make the decisions about the allocations of scarce resources among competing uses so as to maximise human happiness and welfare.
8 need something that is necessary for human survival, such as food, warmth or shelter.
9 normative statement a statement that includes a value judgement and cannot be refuted just by looking at the evidence.
10 opportunity cost the cost of giving up the next best alternative.
11 positive statement a statement of fact that can be scientifically tested to see if it is correct or incorrect.
12 production possibility frontier a curve depicting the various combinations of two products for types of products that can be produced when all the available resources are fully and efficiently employed.
13 productive efficiency when a firm's average cost is at the bottom of the average cost curve. Lowest possible cost.
14 social science the science that studies society and the relationships of individuals. There is no right or wrong solution.
15 want something that is desirable such as fashionable clothing, that is not necessary for human survival.