ECON 208 Lecture Notes - Lecture 2: Newsprint, Scatter Plot

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: El- Attar Mayssun

Document Summary

Normative statements: depend on value judgements and opinions, they cannot be settled by recourse to facts: the government ought to try harder to reduce unemployment, less agreement. Positive statements: do not involve value judgements. They are statements about what is, was, or will be: an effective way to reduce unemployment is to reduce unemployment insurance benefits, more agreement. Economists often disagree with each other in public discussions -> biggest source of disagreement is based on the positive/normative distinction: economists must differentiate normative proffered advice from positive facts. Theories are constructed to explain things: e. g. what determines quantity/price of eggs bought and sold this month in. We can use theories of demand and supply. We use a theory to simplify and help explain complicated phenomena. Theory consists of: a set of definitions about variables (ex. Weather, field prices, transportation costs); endogenous, exogenous (causality)