Economics as a social science

What is the study of microeconomics?

The behaviour of individuals and businesses up to the level of individual industries

What is the study of macroeconomics?

Looking at the whole economies or groups of economies as the EU or the eurozone. Sometimes even looking at the whole world

What is economics?

The social science that analyses the production, distribution, and consumption of goods and services

Since the energy price cap has been increasing, what would this effect?

Inflation

What is a tax?

A charge imposed by the government

What is an example of an indirect tax?

VAT

What does VAT stand for?

Value added tax

What type of tax do firms pay?

Indirect tax

What are two examples of direct tax?

• Income tax

• Corporation tax

What 2 things make a science social?

• Involves human behaviour

• Logical

What three parties have to interact between different economic agents for a social social science to involve human behaviour?

• Producers

• Consumers

• Government

What is a consumers aim?

Maximise their utility/satisfaction

What is a consumer?

A person who buys a product

What is the equation for total revenue?

Total revenue (income from sales) - total costs

What is ceteris paribus?

Assumes all other factors are held constant

What is economic models built on?

Assumptions

In the exam what one thing should you always include to allow for critique and evaluation of the point?

An assumption

What is the definition of land in terms of economics?

Natural physical inputs which are used up in production

What is the definition of labour in terms of economics?

The exertion (physical and mental) of workers

What is the definition of capital in terms of economics?

Used to make other goods which are not used up in production

What is the definition of enterprise in terms of economics?

Organiser factors of production taker of risks

What are 2 examples of land in economics?

• Gold

• Wood

What are 2 examples of labour in economics?

• Bakers

• Teachers

What are 3 examples of capital in economics?

• Loans

• Laptops

• Machinery

What is an example of enterprise in economics?

Alan Sugar

What is the factor payment of Land?

Rent

What is a factor payment?

The income received by an individual or firm for providing a factor of production to a firm

What is the factor payment of Labour?

Wages

What is the factor payment of Capital?

Interest

What is the factor payment of Enterprise?

Profit