Unit 1 Flashcards
Explain the meaning of ceteris paribus.
All things being equal, the assumption that whilst a change in one variable is being investigated, all other variables are kept constant.
What is normative economics?
Normative economics is the study and presentation of policy prescriptions involving value judgements about the way in which scarce resources are allocated.
What is positive economics?
Positive economics is the scientific or objective study of the allocation of resources.
What is a normative statement?
A normative statement is a statement which cannot be supported or refuted because it is a value judgement.
What is a positive statement?
A positive statement is a statement which can be supported or refuted by evidence.
Define social science.
Social science is the study of societies and human behaviour using a variety of methods including the scientific method.
What is the scientific method?
The scientific method subjects theories or hypotheses to falsification by empirical evidence.
What is a theory or model?
This is a hypothesis which is capable of refutation by empirical evidence.
Define law in an economics sense?
Law is a theory or model which has been verified by empirical evidence.
