1.

2 From the syllabus

• Economics as social science: Economics is both Social and Science. It is a
combination of subjects like Ethics, Political science, Science, Sociology, History
etc.
• Economics as social: It is related to people, society, their opinions, wants etc.
There is theory, research, history, statements, arguments etc. Hence it is social.
• Economics as Science: Its not science like physics, Chem. But it includes
experiments, data and table, graphs and their interpretation, mathematical
calculations etc.
• Hence, economics is not exactly science nor social but a combination.
• Important: If question says is Economics Science? You don’t directly just say Yes.
You gives reasons for why it is and why its not. (as for reasoning why not: you
don’t do the experiments with tools, there is no accurate value that needs to
come out etc.)
Positive and Normative statement
There are economic issues in day-to-day life. Eg: You guys had to decide
where to study. So how did you make the decision? There are 2 ways.

Opinion based Fact based: the results of

(what people said about the school, the no of
the school, what your students going abroad
senior said, or your from the school, the
relative) quality)

So, either you made a choice to study in KWS based on people's

opinions or looking at the facts or maybe both.
• Positive Statement: Statement based on evidence, facts. Fact based.
The statement is based on what will happen. Usually, you will find the
word will in the sentence. (Science part of Economics).
• Eg: practicing past papers will produce best results.
• Fall in price of Pepsi, increases the sales.
• Normative statement: Statement based on opinion. Opinion based.
The statement is based on what should happen. Words like should
and ought to be are there in the sentence. (Social part of economics)
• Eg: The reference economics should help you in making notes. (That’s
my opinion)
• Government should provide free heath care. (people's opinion)
Important: As economics is both social science. While solving the issues
and decision making, they use both positive and normative statement.
Ceteris Paribus
• Meaning: Other things remaining constant. Or other things remaining
equal. This is used to simplify a situation by taking just one factor and
keeping other things constant.
• Eg: If price of Pepsi falls, ceteris paribus the sales increases. There are
other factors that might have caused the price to fall, like decrease in
quality, quantity etc which might generate other outcomes in sales.
But to make the analysis easier, we keep the other factors constant.
Just look at the price factor. And make the analysis that the sale
increases.
Time Period
Change is all around us. To keep track of change time is required. Also, over
time things changes. Hence time period is important to see the changes.
• Time period can be separated effectively in terms of:
1. Short-run: Time period where the firm can change only 1 factor of
production. Usually at this short time, labor changes.
2. Long-run: Time period where all the factors of production can change.
Capital can increase, more machineries or more labor. Maybe more no of
buildings added to the company, they bought more land.
3. Very long run: Time period where not only all the factor of production
changes but other inputs also changes. As in the government rules and
regulations, people's opinion, social consideration etc.