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19 Cards in this Set
- Front
- Back
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Basic Economic Problem
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Resources have to be allocated between competing uses because WANTS ARE INFINITE WHILST RESOURCES ARE SCARCE.
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Economic Goods
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Goods which are scarce because their use has an opportunity cost.
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Free Goods
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Goods which are unlimited in supply and which therefore have no opportunity cost.
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Needs
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The minimum which is necessary for a person to survive as a human being.
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Wants
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Desires for the consumption of goods and services.
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Opportunity Cost
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THE BENEFITS FORGONE ON THE NEXT BEST ALTERNATIVE.
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Scarce Resources
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Resources which are limited in supply so that choices have to be made about their use.
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Normative Economics
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The study and presentation of policy prescriptions involving value judgements about the way in which scarce resources are allocated.
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Normative Statement
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A statement which cannot be supported or refuted because it is a value judgement.
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Positive Economics
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The scintific or objective study of the allocation of resources.
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Positive Statement
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A statement which can be supported or refuted by evidence.
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The Scientific Method
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A method which subjects theories or hypotheses to falsification by empirical evidence.
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Division of Labour
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Specialisation by workers
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Productivity
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Output per unit of input employed
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Primary Sector
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Extractive and agricultural industries
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Secondary Sector
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Production of goods, mainly manufactured
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Tertiary Sector
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Production of services
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Market
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Any convienant set of arrangements by which buyers and sellers communicate to exchange goods and services.
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Specialisation
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A system of organisation where economic units such as households or nations are not self-sufficient but concentrate on producing certain goods and services and trading surplus with others.
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