MICRO Y12

Ceteris Parabus

• It means that when the effect of a change in one variable is considered, it is assumed that all other variables are held constant.

• They are objective statements based on evidence or facts that can therefore, be proved or disproved.

• They are subjective statement based on value judgements and cannot be proved or disproved.

• It exists because resources are finite whereas wants are infinite.

Positive Economics Statements

• It means that when the effect of a change in one variable is considered, it is assumed that all other variables are held constant.

• They are objective statements based on evidence or facts that can therefore, be proved or disproved.

• They are subjective statement based on value judgements and cannot be proved or disproved.

• It exists because resources are finite whereas wants are infinite.

Normative Economics Statements

• It means that when the effect of a change in one variable is considered, it is assumed that all other variables are held constant.

• They are objective statements based on evidence or facts that can therefore, be proved or disproved.

• They are subjective statement based on value judgements and cannot be proved or disproved.

• It exists because resources are finite whereas wants are infinite.

Scarcity

• It means that when the effect of a change in one variable is considered, it is assumed that all other variables are held constant.

• They are objective statements based on evidence or facts that can therefore, be proved or disproved.

• They are subjective statement based on value judgements and cannot be proved or disproved.

• It exists because resources are finite whereas wants are infinite.

Factors of Production

• They are resources and include land, labour capital and enterprise.

• They are whose stock levels can be maintained at a certain level.

• They are those that will eventually be completely depleted.

• It is the next best alternative that is forgone when a choice is made

Renewable Resources

• They are resources and include land, labour capital and enterprise.

• They are whose stock levels can be maintained at a certain level.

• They are those that will eventually be completely depleted.

• It is the next best alternative that is forgone when a choice is made

Non-renewable Resources

• They are resources and include land, labour capital and enterprise.

• They are whose stock levels can be maintained at a certain level.

• They are those that will eventually be completely depleted.

• It is the next best alternative that is forgone when a choice is made

Opportunity Costs

• They are resources and include land, labour capital and enterprise.

• They are whose stock levels can be maintained at a certain level.

• They are those that will eventually be completely depleted.

• It is the next best alternative that is forgone when a choice is made

Production Possibility Frontier

• It illustrates the maximum potential output of an economy when all resources are fully employed.

• It is concerned with the impact of additions to or subtractions from the current situation. The rational decision-maker will only decide on an option if the marginal benefits exceeds the marginal costs.

• It refers to an increase in the productive capacity of an economy indicating an increase in real output.

• It refers to a decrease in the productive capacity of the economy indicating a decrease in real output.

Marginal Analysis

• It illustrates the maximum potential output of an economy when all resources are fully employed.

• It is concerned with the impact of additions to or subtractions from the current situation. The rational decision-maker will only decide on an option if the marginal benefits exceeds the marginal costs.

• It refers to an increase in the productive capacity of an economy indicating an increase in real output.

• It refers to a decrease in the productive capacity of the economy indicating a decrease in real output.