microeconomics principles econ 2613 partial notes

POSITIVE STATEMENTS
Thursday, September 12, 2024 11:43 AM




Derive a set of POSITIVE STATEMENTS
1. Statement referring to “what is”
2. Free of opinion


EXAMPLE: the unemployment rate in
Canada is currently 6.1%.


Positive statements while free of opinion may not
necessarily be true.
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CHAPTER 1 Page 1

,NORMATIVE STATEMENTS
Thursday, September 12, 2024 11:43 AM




COMPARE THIS AGAINST NORMATIVE STATEMENT
• Statement referring to what "ought to be"
• Statement of opinion
Example 1.: not enough people are purchasing
electric cars
2 minimum wage is to low


NORMATIVE STATEMENTS SHOULD ALWAYS
FLOW FROM POSITIVE STATEMENTS.




CHAPTER 1 Page 2

,GAS STATION ANALYSIS
Thursday, September 12, 2024 11:53 AM




THE FURTHEST ONE HAS TO DRIVE TO GET FUEL =
0.5KM
Is this socially optimal ?
➢ 0.25 and 0.75 for a and b respectively the
furthest one has to drive to get fuel=1/4 km
➢ Therefore we may argue {i.e. make a
normative statement } that market forces also
cause people to drive too far for fuel.
➢ Example politics




CHAPTER 1 Page 3

, WHAT IS MICROECONOMICS
Thursday, September 12, 2024 12:08 PM




WHAT IS MICROECONMICS?
➢ DECISION MAKING IN LIGHT OF SCARCITY
WHO ARE THE DECISION MAKERS?
- 1 individuals/households
{or as some textbooks may say
"consumers"}
- 2 firms
{i.e. sole proprietors, partnerships,
corporations}





CHAPTER 1 Page 4