If you follow the news, whether online, TV, news-paper, or radio, you are
likely to hear the views of economists being discussed—about debt crises,
unemployment, income inequality, attempts to reform the healthcare
system, environmental policy, changes to corporate income tax rates, or a
myriad of other issues. Where do economists’ opinions come from? Are
they supported by hard evidence, and if so, why do economists
sometimes disagree with each other over important issues?
Economics is a social science, and in this chapter we explore what it
means to be “scientific” in the study of economics. Along the way we will
learn much about theories, predictions, data, testing, and graphing—
economists use all of these tools and techniques in their attempt to
understand the economic world. We begin with the important distinction
between positive and normative statements.
5. recognize the slope of a line on a graph relating two variables as
the “marginal response” of one variable to a change in the other.