Intro To Economics

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  • Introduction To Economics
    • Economics Is A Social Science
      • Looks at the behaviuor of humans as individuals or part of organsiations and looks at their uses of scarce resources.
      • As it can't be tested in a lab in a controlled environment economists use the idea of 'ceteris paribus' latin for 'all things remaining equal' .
        • Use it to jusge the relationship between two factors e.g. Price & Demand so they will assume that only these two factors change as other variables changing would alter results
          • Allows economists to make predictions and make theories & models
            • As it can't be tested in a lab in a controlled environment economists use the idea of 'ceteris paribus' latin for 'all things remaining equal' .
              • Use it to jusge the relationship between two factors e.g. Price & Demand so they will assume that only these two factors change as other variables changing would alter results
                • Allows economists to make predictions and make theories & models
      • Economic decisons may not always make the most Economic Sense.
        • Often decisions are based on opinions and judgements.
          • Normative Statements - opinions
          • Moral views and value jusdgements.
            • Normative Statements - opinions
          • Positive Statements - objective statements that can be proven by using data
          • Political Judgements- Government may make decisons to get votes e.g. conservative party lower taxes
            • Short-Term Positive Consequenc-es                Chose decisions without thinking long term e.g. tax cuts earn votes but long term mean less spending (austerity)
          • Short-Term Positive Consequenc-es                Chose decisions without thinking long term e.g. tax cuts earn votes but long term mean less spending (austerity)

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