Dylan JC1 Faith

1. Microeconomics is the branch of economics that focuses on the behavior of individual

economic agents, such as households, firms, and markets, and how they make
decisions regarding the allocation of resources.

2. Macroeconomics, on the other hand, deals with the study of the entire economy as a
whole, including factors like inflation, unemployment, economic growth, and overall
demand and supply.

3. Economists use models to simplify complex economic systems and make predictions
about real-world scenarios. These models help analyze economic behavior, understand
cause-and-effect relationships, and provide policy recommendations.

4. A positive statement is an objective and factual statement about how the world is or how
it works, often based on evidence.

5. A normative statement is a subjective statement that reflects an opinion or value

judgment about how the world ought to be, involving matters of ethics, fairness, or
desirability.

6. Ceteris paribus means "all other things being equal." Economists use this concept when
analyzing the relationship between two variables while assuming that all other relevant
factors remain constant.

7. The short run is a time period in which some factors of production are fixed, and firms
can adjust production levels by changing variable factors. The long run is a period where
all factors of production can be adjusted, and firms can enter or exit the market. The very
long run is a theoretical concept, an extended period where all factors can change, and
technology and economic conditions might be significantly different.

8. Microeconomics questions:
- Why do women earn less than men?
- How can data help us understand the world?
- Why do we ignore information that could help us make better decisions?
- What causes recessions?

9. Macroeconomics questions:
- Why are some countries rich and some countries poor?

10. All of the questions in the bulleted list are normative statements because they involve
value judgments, opinions, or subjective views about how things should be, rather than
objective descriptions of how things are.
 11. To convert each of the questions into positive statements:
- What factors contribute to the difference in wages between men and women?
- How does data enable us to understand the world?
- What biases may lead us to ignore information relevant to our decision-making?
- What economic factors contribute to recessions?
- What factors contribute to income disparities between different countries?

12. Economics is a social science because it studies how people make decisions with
scarce resources, focusing on social problems beyond just money. It uses research and
models to explore economic behavior and its impact on society, considering cultural,
historical, and institutional factors.