Study Notes
Tutorial Questions – Sets 1 and 2
Week 2 Tutorial:
1. What is the difference between microeconomics and macroeconomics?
Microeconomics is all about particular economic units, with consideration of these individual units, where as macroeconomics is all about concern for the economy as a whole or with basic/generalized subdivisions.
2. What is the difference between deductive and inductive methods in economics when discussing theories?
Deductive methods (or also known as hypothetical methods) is all about theories turning in facts, where as inductive methods is the complete opposite. It is all about turning facts into theories.
3. What is the ceteris paribus assumption? Why is it used in economics?
Ceteris Paribus assumption is also known as other things being equal. In order to simplify the process of analysis, economists will assume that all variables are constant and not just the variable being considered. It is used in economics to help the economist focus on the particular factor.
4. #What is the difference between positive and normative statements in economics?
Positive economics is all about facts and avoiding value judgments. It attempts to set out scientific statements about economic behavior. Normative economics deals with value judgments about what the economy should be like or what particular policy action should be recommended, based on economic relationships.
5. Explain the terms ‘fallacy of composition’ and ‘the post-hoc fallacy’. Give examples. Why might these fallacies lead to wrong conclusions when analyzing economic problems?
Fallacy of Composition refers to assuming that if one thing is true for a particular individual, it will also be true for a whole group. An example being that if one person states that they earn $1000 a week after tax is the same for the rest of the group, but this is not true, as not everyone will have that same job or the same age. The Post-Hoc Fallacy refers to thinking that a first event will cause the
Week 2 Tutorial:
1. What is the difference between microeconomics and macroeconomics?
Microeconomics is all about particular economic units, with consideration of these individual units, where as macroeconomics is all about concern for the economy as a whole or with basic/generalized subdivisions.
2. What is the difference between deductive and inductive methods in economics when discussing theories?
Deductive methods (or also known as hypothetical methods) is all about theories turning in facts, where as inductive methods is the complete opposite. It is all about turning facts into theories.
3. What is the ceteris paribus assumption? Why is it used in economics?
Ceteris Paribus assumption is also known as other things being equal. In order to simplify the process of analysis, economists will assume that all variables are constant and not just the variable being considered. It is used in economics to help the economist focus on the particular factor.
4. #What is the difference between positive and normative statements in economics?
Positive economics is all about facts and avoiding value judgments. It attempts to set out scientific statements about economic behavior. Normative economics deals with value judgments about what the economy should be like or what particular policy action should be recommended, based on economic relationships.
5. Explain the terms ‘fallacy of composition’ and ‘the post-hoc fallacy’. Give examples. Why might these fallacies lead to wrong conclusions when analyzing economic problems?
Fallacy of Composition refers to assuming that if one thing is true for a particular individual, it will also be true for a whole group. An example being that if one person states that they earn $1000 a week after tax is the same for the rest of the group, but this is not true, as not everyone will have that same job or the same age. The Post-Hoc Fallacy refers to thinking that a first event will cause the
References: Week 2 Tutorial (question 9): Amosweb, Production Possibilities, (2000-2012) - http://www.amosweb.com/cgi-bin/awb_nav.pl?s=cls&c=dsp&fcd=pge&crs=macro&lsn=4&pge=12 William C. Spaulding, Copyright 1982-2012, Supply and Demand Market Equilibrium – http://thismatter.com/economics/market-equilibrium.htm