, Economic Methodology
Natural science- develop theories and test them
Social science - cannot control our experiments in a laboratory
Normative statements - these express an opinion about what ought to be. They are subjective
statements that carry some value judgement.
Positive statements- these can be tested or rejected based on existing
evidence. They are objective statements.
Value judgements- can influence economic decision making and policy. Different economists
may make different judgements from the same statistic.
, The nature and purpose of economic activity
-To produce goods and services to satisfy the needs and wants for the population.
Scarcity - when the limited resources are insufficient to meet the unlimited wants of
the people.
Opportunity cost- The next best alternative forgone, when an economic decision is
made.
Durable-Goods that don’t run out as we use them.
Happiness in economics is referred to as welfare and welfare is
measured in terms of utility
Natural science- develop theories and test them
Social science - cannot control our experiments in a laboratory
Normative statements - these express an opinion about what ought to be. They are subjective
statements that carry some value judgement.
Positive statements- these can be tested or rejected based on existing
evidence. They are objective statements.
Value judgements- can influence economic decision making and policy. Different economists
may make different judgements from the same statistic.
, The nature and purpose of economic activity
-To produce goods and services to satisfy the needs and wants for the population.
Scarcity - when the limited resources are insufficient to meet the unlimited wants of
the people.
Opportunity cost- The next best alternative forgone, when an economic decision is
made.
Durable-Goods that don’t run out as we use them.
Happiness in economics is referred to as welfare and welfare is
measured in terms of utility
