Foundation Of Economics Notes

The Foundations of economic science

Economics as a social science

Social Science

Economics is 100% a study of human behavior and because volume are each diverse and capricious, we know that no legal philosophy or prediction of Economics can ever so be 100% reli competent.

Social Scientific Method

The scientific method is the dish used to study, explain, and analyze economic phenomena. It helps make sense of the plainly chaotic events of economic life. The price of gasoline rises. wherefore? A local factory lays off a hundred employees. wherefore? The President proposes a tax cut to stimulate the miserliness. Why?

Model Building

In order for economists to test their theories, they build notional models. These models will be manipulated to see what depression a trusted change has on different sectors. When economists emergency to test the effect of one variable on another, they need to be able to isolate the effect to that one variable by assume that there is no change in the others.

Positive and normative Economics

Positive Economics revolves around statements that can be be right or wrong. An example is Germanys unemployment rate in 2010 was 4.3%.
A normative Statement rather is a be of opinion and cannot conclusively be proven right or wrong.



Ronaldo might be the best soccer player ever to have walked the earth.
While it is easier to deal with positive economics, oftentimes the normative is more interesting to deal with as different results can be obtained depending on the viewpoint and opinion of the situation.

circumscribe Systems

Economics is a study of rationing systems. Since the resources in an economy are relatively scarce, there must be nigh way of rationing these resources and the goods and services produced by them.

In surmise there are two main rationing systems:

1) be after Economies: In a planned economy, also known as a centrally planned economy or insure economy, decisions as to what, how and who, to produce for are made by the...If you want to get a full essay, order it on our website: Ordercustompaper.com



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