Economics as a social science

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Economics as a social science Objectives To understand the concept ceteris paribus To understand the difference between positive and normative statements Homework: Explain the difference between positive and normative statements using examples from a current article of your choice.

Do you think this statement is false? Why? ‘Free school meals for children at infant school will reduce the cost burden in the future for the NHS’. Brainstorm the assumptions which might underlie this economics argument. Do you think this statement is false? Why?

Economic Study Economics is a social science - a subject concerned with human behaviour Theories are difficult to study because: - many things may change simultaneously - events can not be tested in labs Economists try to isolate singular events by saying ‘all other things remaining equal’ or ‘ceteris paribus’

In essence, Ceteris Paribus allows us to make predictions with confidence about Hootie’s behavior during a walk, regardless of the environment or circumstances.

‘Free school meals for children at infant school will reduce the cost burden in the future for the NHS’. The population may get even older and therefore burden the NHS But there might be an outbreak of a virus in infant schools There may be a war that starts that burdens the NHS http://study.com/academy/lesson/the-concept-of-ceteris-paribus-in-economics.html

But that’s not the case…. Ceteris paribus is an essential part of basic economic theory. And if you, a hapless student of economics, refuse to believe in the existence of the Ceteris Paribus Fairy, you'll doubtlessly end up thinking too much about what else could happen in the situation at hand. It's a flaw most smart, logically-thinking people fall into. On economics exams, it often results in wrong answers and bad exam grades.

Economic Study Economic models are developed to illustrate economic events by isolating individual relationships – these are then used to make forecasts about how one event will affect others in the future Eg. If prices for chocolate rise, we will buy less chocolate and more crisps? Eg. If prices for chocolate rise, will farmers grow more Cacao?

Why Do Economists Disagree? Different opinions about who should be included in economic statistics Technical, cultural, & social changes affect behaviour and its interpretation Views differ on what policies should be carried out to affect the economy in the desired way

Positive v. Normative Statements Positive Statements “statements of fact that can be proven using relevant data” - disagreements are settled by looking at the data Hong Kong is now part of China. Normative Statements “value judgements that involve opinion and cannot be proved right or wrong” - disagreements are settled by votes More aid should go to developing countries.

Positive v Normative Statements Read this article and highlight the positive statements in red and normative statements in green. Take this quiz: http://beta.tutor2u.net/economics/blog/zondle-game-positive-and- normative-statements

Complete the worksheet