Topics 1: Introduction to Microeconomics(Economics as a social science)

Question 1

Define Ceteris paribus

Answer 1

the assumption that, whilst the effects of a change in one variable are being investigated, all other variables are kept constant. (All things being equal)

Question 2

Define Law

Answer 2

a theory or model which has been verified by empirical evidence.

Question 3

Define Normative economics

Answer 3

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

Question 4

Define Normative statement

Answer 4

a statement which cannot be supported or refuted because it is a value judgement.(“what ought to be”)

Question 5

Define positive economics

Answer 5

the scientific or objective study of the
allocation of resources.

Question 6

Define positive statement

Answer 6

a statement which can be supported or
refuted by evidence.

Question 7

Define Scientific method

Answer 7

a method which subjects theories or
hypotheses to falsification by empirical evidence.

Question 8

Define social science

Answer 8

the study of societies and human behaviour
using a variety of methods, including the scientific method.

Question 9

Define Theory or model

Answer 9

a hypothesis which is capable of refutation by empirical evidence.