Сhapter 2

What is economics?

Ceterie paribus

Positive and Normatives statements

MICROECONOMICS

time periods

MACROECONOMICS

The study of the whole economy or groups of economics. Macroeconomics also looks at how consumers and firms interact on a broader level

is the study of individual markets.it looks at the behaiviurnand decisions of households and firms,and how they interact.

positive

  • A fall in supply of petrol leads to an increase in its price
  • A 10% increase in tourist numbers in Martitius has created 10% more employments
  • An increase in taxation on cars result in fewer cars being sold
  • The inflation rate in 2021 is 8%

Normative statements

1)A fall in suply of petrolshould lead to an increase in its price.
2)A 10% increase in tourist numbers in mauritus is likely to create at least 15% more jobs in the tourist industry
3)An increase in taxeation on cars might result in a fall in demand for new cars
4)the inflation rate of 8% in 2021 was the worst in 10 years.

It’s used by economics to refer to a situation where other things remain equal or are unchanged

Allows economist to simplify a situation by assuming that apart from a single change of circumstances, everything else is unchanged

We live in a world of change,change is around us in daily life,and in the ways in which economics función.Economists use time periods to assess how over time change can influence the concepts that economists seek model and explain.

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As you study economics, you will realise the importance of the term ceteris paribus when explaining change.

Ceteris paribus simply means 'other things equal'.

Remember to include the term in any written answers where relevant.

Example:The following time periods are often used when economists discuss the factors of pruduccion.