1.2 Economic Methodology

Question 1

What is Economics

Answer 1

The study of society and the relationships between individuals in society

Question 2

Meaning of microeconomics

Answer 2

The study of individual markets and small aspects of the economy

Exp:
demand for a product in a market
Supply and demand in individual markets

Question 3

Meaning of macroeconomics

Answer 3

The study of problems relating to all economics units of an economy as a whole

Exp:
Reasons for inflation
Economic growth
International trade and globalisation

Question 4

Meaning of positive statement

Answer 4

A statement that is based on facts or actual evidence

Positive statements are objective statements

Question 5

Meaning of normative statements

Answer 5

Statements that are based on economists opinion or value of judgement

Normative statements are subjective statements

Question 6

Ceteris Paribus

Answer 6

A Latin phrase that means all other things remaining constant