Economic Methodology – AQA Spec

Level: AS Levels, A Level, GCSE – Exam Boards: Edexcel, AQA, OCR, WJEC, IB, Eduqas – Economics Revision Notes

Economics as a Social Science – Scitovsky’ Theory: proposed that Economics is a social science as it attempts to use scientific methods to analyse the behaviour of people within markets, firms and economies

The ‘Ceteris Paribus’ Assumption

• A Latin phrase which refers to all ‘other things being equal’
• When an effect is caused due to a change in one variable, the other variables are held constant and do not differ in value

The inability in economics to make scientific experiments

• Economics is a social science and involves people, therefore it is impossible for economists to conduct lab experiments

Positive Economics

Positive economics is concerned with factual information and can be tested to be true or false. Positive statements use a scientific approach towards economics.

For example

• A rise in the tax rate on cigarettes will lower rates of lung cancer.
• A decrease in bus ticket prices will reduce car congestion in London.

Normative Economics

Normative economics is concerned with value-judgements and opinions. Normative statements are subjective and often use sentences which include the following words, should, fair, unfair, better or worse.

For example:

• Corporation tax should be lower for businesses outside of London
• The government should reduce tax on cigarettes
• The governments tax rate on alcohol is unfair

Moral and Political Judgements

The positive consequences of different decisions and moral / political judgements influence people’s views regarding the best option