Tilly Salmon
Microeconomics
Microeconomics
Module 1
Economic Methodology and Problems
1.1 Economic Methodology
The difference between positive and normative statements
- Normative statement
- A valued judged that cannot be tested
- Positive statements
- A statement/ fact that can be scientifically tested (accepted/rejected)
Economics as a social science
1.2 Purpose of economic activity
The central purpose of economic activity is the production of goods and services to satisfy
needs and wants
- Needs
- Something people cannot do without (eg. air, water, food, shelter)
- Want
- Something people would like to have but is not essential for survival (eg fashionable
clothes)
- Economic Welfare
- Economic well-being of individuals within an economy (quality of life, nice views)
Page 1
Microeconomics
Microeconomics
Module 1
Economic Methodology and Problems
1.1 Economic Methodology
The difference between positive and normative statements
- Normative statement
- A valued judged that cannot be tested
- Positive statements
- A statement/ fact that can be scientifically tested (accepted/rejected)
Economics as a social science
1.2 Purpose of economic activity
The central purpose of economic activity is the production of goods and services to satisfy
needs and wants
- Needs
- Something people cannot do without (eg. air, water, food, shelter)
- Want
- Something people would like to have but is not essential for survival (eg fashionable
clothes)
- Economic Welfare
- Economic well-being of individuals within an economy (quality of life, nice views)
Page 1
