1.1 Economic methodology

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  • 1.1 Economic methodology
    • Economics as a social science
      • Studies economic behaviour and relationships, between individuals and groups
        • individual behaviour e.g. - why people buy  more strawberries when the price falls
    • Economics and scientific methodology
      • Demand theory
        • 1. Observe consumer     2. Hypothesis on consumer spending       3. prediction formed          4. evidence tests predictions    5. evidence supports hypothesis, theory formed | evidence doesn't support, hypothesis amended or rejected
    • Social sciences and natural sciences
      • If theories allow exceptions then they're used to generalise
        • Positive economics: what will happen Normative economics: what ought to happen
    • The difference between positive and normative statements
      • Normative: value judgement, not refuted by evidence
      • Positive: fact, tested to see if correct


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