1.1.1 Economic methodology

Question 1

Economics is the study of…

Answer 1

…how the worlds scares resources are allocated to competing uses to satisfy society’s wants.

Question 2

Positive economic statements

Answer 2

objective statemets that can be tested against facts to be declared either true or flase, don’t necessarily have to be true.

Question 3

Normative economic statements

Answer 3

subjective opinions or value judgements that cannot be tested against facts. Often concerned about what individuals, firms or govs should do based on ethical and moral standpoints.