1.1.1: Economics as a Social Science

Question 1

What is economics?

Answer 1

• A social science that studies the production, distribution and consumption of goods and services

Question 2

What is a social science?

Answer 2

• The study of human behaviour and interactions

Question 3

What is the meaning of ‘ceteris paribus’ and the assumption?

Answer 3

• All other factors being equal
• The assumption means that all things are equal, economists use this to make assumptions/ predictions on trends and growth/ decrease in the economy

Question 4

Why is the ceteris paribus assumption used?

Answer 4

• The assumption allows economists to analyse the relationships between variable without complications of others influencing others

Question 5

What is the Law of Demand?

Answer 5

• when the price of a good or services increases, the quantity demand decreases (and vice versa)
• the Law of Demand is an example of ceteris paribus

Question 6

What is the Law of Supply/ Supply & Price?

Answer 6

• a microeconomic law which states that as the price of goods increase, the supply of the goods increase
• the direct relationship between the supply and price of goods

Question 7

What is marginal utility?

Answer 7

• a concept used by economists to determine how much of item consumers are willing to purchase