Economics as a social science

Question 1

What does ‘ceteris paribus’ mean, and what is its use

Answer 1

Ceteris paribus - with all other things being equal
- This enables economists to make deductions when building models
- Simplifies analysis so that the impact of a single change in a variable
can be examined

Question 2

What is a positive statement

Answer 2

A statement based on facts that can be proved or disproved with data or evidence or by using a scientific approach

Question 3

What is a normative statement

Answer 3

A statement based on value judgements and are subjective
They cannot be proved by data due to them being an opinion