Unit 4: Positive and Normative Economies

Question 0

Equilibrium

Answer 0

The point to where what is expected or planned is equal to what is realized or actually happens

Question 1

Ceteris Paribus

Answer 1

The assumption that all other variables within the model remain constant whilst one change is being considered

Question 2

Law

Answer 2

A theory or model which has been verified by empirical evidence

Question 3

Normative economics

Answer 3

The study and presentation of policy prescriptions involving value judgments about the way in which scarce resources are allocated

Question 4

Normative statement

Answer 4

A statement which cannot be supported or refuted because it is a value judgment

Question 5

Partial and general models

Answer 5

A partial model is one with few variables whilst a general model has many

Question 6

Positive economics

Answer 6

The scientific or objective study of the allocation of resources

Question 7

Positive statement

Answer 7

A statement which can be supported or refuted by evidence

Question 8

Static and dynamic models

Answer 8

Astatic model is wow one time is not a variable. In a dynamic model, time is a variable explicit in the model.

Question 9

The scientific method

Answer 9

A message which subjects theories or hypotheses to falsification by empirical evidence

Question 10

Theory or model

Answer 10

A hypothesis which is capable of refutation by empirical evidence