1.1.1 Economics as a social
science
Economists thought process? investigating how scarce
resources are allocated to
provide for unlimited human
wants
How are models developed + used? include assumptions
judged upon ability to explain +
predict consumer/producer
behaviour
difference between theory +
model?
used interchangeably
theory - words
models - precise +
mathematical terms
💡 can be unrealistic due to
simplification
Why is economics a social science? variables change
human behaviour = unpredictable
+ often simplified
usually expressed in terms of
probability
often not possible to set up
experiments, control groups or
only change one variable
1.1.1 Economics as a social science 1
, What does ceteris paribus mean? all other things remaining same
💡 isolate one factor +
assuming all other things
same → make judgement
on effect of changing it
1.1.1 Economics as a social science 2
, 1.1.2 Positive + normative
economic statements
What is positive economics? scientific/objective study of
subject
can be supported/refuted with
evidence
What is normative economics? concerned with value judgements
an assessment of something
as good or bad in terms of
one's standards or priorities
non-scientific approach
often includes some positive
economics within it
💡 normative statements often
include words like : ought,
should, fair, unfair, better,
worse
What is the role of value judgements personal preferences, beliefs +
in influencing economic decision subjective assessment underpin
making + policy? normative economics
value judgements have major
influence
explores preferences of
individuals, firms + government
1.1.2 Positive + normative economic statements 1
, 💡 value judgements > opinion
1.1.2 Positive + normative economic statements 2
science
Economists thought process? investigating how scarce
resources are allocated to
provide for unlimited human
wants
How are models developed + used? include assumptions
judged upon ability to explain +
predict consumer/producer
behaviour
difference between theory +
model?
used interchangeably
theory - words
models - precise +
mathematical terms
💡 can be unrealistic due to
simplification
Why is economics a social science? variables change
human behaviour = unpredictable
+ often simplified
usually expressed in terms of
probability
often not possible to set up
experiments, control groups or
only change one variable
1.1.1 Economics as a social science 1
, What does ceteris paribus mean? all other things remaining same
💡 isolate one factor +
assuming all other things
same → make judgement
on effect of changing it
1.1.1 Economics as a social science 2
, 1.1.2 Positive + normative
economic statements
What is positive economics? scientific/objective study of
subject
can be supported/refuted with
evidence
What is normative economics? concerned with value judgements
an assessment of something
as good or bad in terms of
one's standards or priorities
non-scientific approach
often includes some positive
economics within it
💡 normative statements often
include words like : ought,
should, fair, unfair, better,
worse
What is the role of value judgements personal preferences, beliefs +
in influencing economic decision subjective assessment underpin
making + policy? normative economics
value judgements have major
influence
explores preferences of
individuals, firms + government
1.1.2 Positive + normative economic statements 1
, 💡 value judgements > opinion
1.1.2 Positive + normative economic statements 2
