Summary
Summary Microeconomics- 1.1 Nature of Economics
- Module
- 1.1 Nature of economics
- Institution
- AQA
Full exam revision notes on the AQA Microeconomics 'Nature of Economics' section 1.1.1 - 1.1.6
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1.1.1 Economics as a social scienceCeretis paribus: ‘holding all other things constant’ / ‘all else being equal’
It acts as an indicator of the e ect a variable has over another, provided that the rest remain the
same.
• Helps isolate single economic variables in relation to the others since economists cant use
experiments like scientists: all situations must remain natural.
1.1.2 Positive and normative economic statements
Positive: describes and explains various economic phenomena that can be tested, based on fact
Normative: focuses on norms and values ‘should be’. Moral decisions
Value judgements: an evaluative statement of how good/ bad you think an idea or action is
1.1.3 The economic problem
There are in nite wants, but nite esources
• The main issue is scarcity and how to best distribute scares resources
Opportunity cost: the next bets thing forgone, the potential bene ts missed out when choosing one
alternative over the other
The law of increasing OC: a curve indicates, the more we produce of something, the more of the
other thing is being given up
o
10 B
1.1.4 Production possibility frontiers
A PPF is a curve illustrating the possible quantities that can be produced of two products if both
depend on the same nite resource for their manufacture.
• Demonstrates is a nations economy has reached its highest level of e ciency
• Various combinations of the amounts of two goods which can be produced within the given
resources and tehnology available
combinations
cyrotgetattanaceintreaventeconomy
o at c
s
i B
ppr
60 too ammogoods
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