| Why is Economics seen as a Social Science? | -Looks into how Humans Behave, Alone or in Organisations, and how they use Scarce Resources |
| How may Economics be similar to that of Natural Sciences? | -Economics makes Theories to explain Events
-Limit the Variables in an Investigation [Ceteris Paribus]
-Test Theories and Models against Facts
-Using Graphs, Statistics and Observations
-Using Empirical [Data via Experiments or Observations] to improve Economic Models
-Make Predictions |
| How may Economics be Different to that of Natural Sciences? | -Economists can't do Laboratory Experiments where One Variable is Changed at a time - Logistically and Practically Impossible |
| What is Ceteris Paribus? How do Economists use it? | -Ceteris Paribus is when 'all other things remaining equal'
-Economists use this to have 2 Factors change and 'all other things remaining equal' that would otherwise Affect the Result
-This allows Theories, Models and Predictions |
| How may Economic Decisions be based on? | -Normative Statements: People's Opinion
-Moral Views & Value Judgements: [Wealth should be shared as no one deserves to live in Poverty]
-Political Judgement: Taxes falling --> Re-Elected?
-Short Term Positive Consequence: No Concern of Long Term Consequences [Taxes falling to win but reducing Government Income] |
| What are Positive Statements and Normative Statements | -POSITIVE Statement are Objective Statements that can be Tested via Current Evidence. They can show if the Economic Idea is True
-NORMATIVE Statement are Subjective Statements that are simply Opinions. Important as Decision making and Gov Policy influenced by it - Political Party may raise Taxes to Distribute Income |
