Central messages

Question 1

What are the two key issues in economics

Answer 1

1. Externalities
2. Market power

Question 2

What is externalities an issue

Answer 2

As theres a misalign individual decisions with societal efficency goals, leading to inefficiency in unregulated markets

Question 3

why is market power an issue in economics

Answer 3

Distorts prices, ingorning efficient outcomes. Natural monopolies require gov intervention for efficiency

Question 4

What are the scientific methods in economics

Answer 4

• Types of ?
• Hypothetico- decuctive method
• Kuhn’s scientific revolutions

Question 5

What are the two types of questions in Econ

Answer 5

Postives - objective
Normative - subjective, what should be

Question 6

What are hypothetic - deductive methods

Answer 6

Begins with assumptions and hypotheses

Question 7

what do hypothetic - deductive methods combine

Answer 7

Theoretical analysis
Empirical anaylsis - test, controlled, natural

Question 8

What are Kuhn’s scientific revolutions

Answer 8

• Normal science
• Scientific revolutions, paradigm shifts

Question 9

What are three main erros with models in economics

Answer 9

1. Internal logical flaws
2. Failing to represent reality adequately
3. Models are contextual - vaild in one situation but not universally