张五常经济解释卷一第一至第三章.pptVIP

By Mr. LAU san-fat/ver 2004 CH1-The Scope of Economic Analysis Chapter 1: The Scope of Economic Analysis HKAL Microeconomics T. W. G. Hs. Lo Kon Ting Memorial College References: A-Level Microeconomics, CH. 1, 2 15 HKALE Microeconomics, CH. 1, 2, 14 19 張五常《經濟解釋卷一》第一至第三章 Exchange and Production, CH. 1 5 What is Economics? an empirical science resting on the assertion or postulate of self-interest to explain observable economic behavior or phenomena history repeats itself, however, facts do not speak for themselves economists therefore need to ‘theorize’ in order to explain and predict facts/economic phenomena. What is Economics? As an empirical science, economic theories are constructed: to explain human behavior by finding out what conditions lead to what consequences to predict the occurrence of similar events in the future and how behavior will change when there is a change in the constraints they face. Positive Versus Normative Economics Positive economics contains descriptive statements, propositions and predictions about the world. Normative economics makes statements about what ought to be, or about what a person, organization or nation ought to do. Ex 1: Is A-L economics concerning about positive or normative one? Attributes of Economic Analysis Economic analysis is solely scientific and strictly positive. Economic theory rests on understanding of human traits. theories are abstractions of the world to theorize is to pick out the ‘relevants’ from the ‘irrelevants’ Economists construct and test theories. Methodology – Scientific Inquiry: Constructing Theories interesting real-world observations prompt the construction of a theory postulating economic behavior (i.e. making axioms or basic assumptions) picking out relevants from the irrelevants (i.e. making abstractions) Methodology – Scientific Inquiry: Constructing a Theory establishing the interrelationship among variables and ideas in the form of hypothesis (including ‘test conditions’ ‘predicted o