Chapter 1. An Introduction To Economics

Economics?!

The Economic Problem: Scarcity

There are TWO kinds of Economic Statements: Normative and Positive Statements

Positive statements are objective statements that can be tested, amended or rejected by referring to the available evidence. Positive economics deals with objective explanation and the testing and rejection of theories.

Normative statements are subjective statements – i.e. they carry value judgments.

A value judgement is a subjective statement of opinion rather than a fact that can be tested by looking at the available evidence.

 

PRACTICE!

Read these examples and say whether they are Positive Statements or Normative Statements :

  1. A fall in incomes will lead to a rise in demand for own-label supermarket foods
  2. Pollution is the most serious economic problem
  3. The government should increase the minimum wage to £7 per hour to reduce poverty.
  4. The rising price of crude oil on world markets will lead to an increase in cycling to work
  5. The government should enforce minimum prices for beers and lagers sold in supermarkets and off-licences in a bid to control alcohol consumption
  6. Resources are best allocated by allowing the market mechanism to work freely
  7. A rise in average temperatures will increase the demand for sun screen products.
  8. A reduction in income tax will improve the incentives of the unemployed to find work.
  9. If the government raises the tax on beer, this will lead to a fall in profits of the brewers.
  10. Higher interest rates will reduce house prices
  11. Cut-price alcohol has increased the demand for alcohol among teenagers
  12. A car scrappage scheme will lead to fall in the price of second hand cars
  13. Unemployment is more harmful than inflation
  14. The congestion charge for drivers of petrol-guzzling cars should increase to £25
  15. The government is right to introduce a ban on smoking in public places.
  16. The retirement age should be raised to 70 to combat the effects of our ageing population.

Key point:

 

Most economic decisions and policy are influenced by value judgements, which vary from person to person, resulting in fierce debate between competing political parties.

Vs.

Focusing on the evidence is called adopting an empirical approachevidence-based work is becoming more and more important in shaping different government policies and how much funding to give to each.

Economics in the age of Big Data: data-driven policy-making, policy-modelling
Economics in the age of Big Data: data-driven policy-making, policy-modelling

SES LAB

YOUR TASKS:

  • Fill in the blanks in video #1: find out as many as you can! you can ask your classmates for help... 
  • take notes from video #2: what is the scarcity in economics?
  • Read the paper carefully and listen to the video#3: Under what condition economics is a science?
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Vocabulary / notions

Économie / science économique : Science sociale qui étudie les décisions individuelles et collectives de production, répartition et utilisation des ressources rares

Economics: Social science that studies individual and collective decisions about the production, the distribution and  use of scarce (limited) resources

Rareté : tension entre des ressources limitées et des besoins humains illimités.

Scarcity: tension between limited resources and unlimited human needs.  

Modèle: représentation simplifiée de la réalité, qui n’en retient que quelques éléments pour dégager des liens de causalité entre eux. 

Model / economic model: simplified representation of reality, which retains only a few data to identify causal links between them.

Causalité : un lien de causalité existe lors qu’il y a un lien de cause à effet entre une variable A et une variable B.

Causality (or causation):  Causality is the relationship between causes and effects

Corrélation : constat statistique que deux variables évoluent dans le même sens (corrélation positive) ou dans un sens contraire (corrélation négative). 

Correlation is, “A statistical measure (expressed as a number) that describes the size and direction of a relationship between two or more variables.”(Bureau of Statistics)

Données: informations utilisées pour élaborer ou tester des hypothèses. Elles peuvent être quantitatives (chiffrées) ou qualitatives (observations, interviewes). 

Data: facts and statistics collected together in order to create and test hypotheses. Data can be quantitative (figures) or qualitative (observations, interviewes).



Pour aller plus loin (inspiration : Le Livre Scolaire)

George Orwell, La Ferme des animaux, 1945. 

L'auteur utilise les animaux et la ferme comme une allégorie des comportements humains, alors qu'un régime autoritaire se met en place...

Economix, de Michael Goodwin et Dan Burr (Les Arènes, 2012) :  une BD qui retrace l'histoire de la pensée économique, avec humour. Utilisable en SES et en histoire.

Un incontournable. 

Une BD de Christophe Blain et Abel Lanzac (Dargaud, 2010), co-écrite par un diplomate qui a travaillé au Quai d'Orsay. 

Quelle place pour la différence dans une société ? Comment les stéréotypes peuvent-ils biaiser les rapports entre les individus ? Voilà les questions existentielles soulevées par Zootopie !

Documentaire de Gilles Perret (2016), entièrement visible sur Youtube, qui relate la mise en place de la Sécurité Sociale en France à la Libération. 

La Princesse des Neiges, c'est un trésor de sociologie !

Étienne Tabbagh et Laureen Melka, les profs d’éco les plus cools de France, dénouent sans théories fumeuses les questions les plus épineuses du débat public. Spla$h, c’est l’émission qui jette un pavé dans la mare de l’économie.

 

Écoutez un exemple de podcast : "l'économie peut-elle mesurer le bonheur ?"