Cambridge International A Level · Economics (9708)

Economic methodology: Practice Questions

5 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on Economic methodology.

10 questions26 marksFree, no account

Question 1

1 mark

Which of the following is an example of a positive economic statement?

Question 2

1 mark

When an economist uses the assumption ceteris paribus to analyze the effect of a rise in income on the demand for a specific good, which variables must be held constant?

Question 3

1 mark

A policy analyst claims: 'Provided that all other factors remain constant, an increase in the national minimum wage from \$10 to \$12 will lead to a 2% rise in structural unemployment.'

Which methodological tool is being used by the analyst, and how would this claim be classified?

Question 4

1 mark

Which of the following is a positive economic statement?

Question 5

1 mark

Which of the following is a normative economic statement concerning the factors of production?

Question 6

2 marks

State the key distinction between a positive economic statement and a normative economic statement.

Write your answer out first, then check it against the worked solution.

Question 7

3 marks

Explain why economics is classified as a social science and describe one reason why it is difficult for economists to establish scientific laws through controlled experiments.

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Question 8

3 marks

Explain why the ceteris paribus assumption is a fundamental component of economic methodology when testing the relationship between the price of a good and its quantity demanded.

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Question 9

8 marks

Economics is often defined as a social science that uses specific methodologies to develop theories and models.

(a) State the difference between positive and normative economic statements. Provide one example of each to support your answer.

(b) Explain the importance of the ceteris paribus assumption in economic analysis and describe how the time period (short run versus long run) influences the ability of a firm to adjust its factors of production.

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Question 10

5 marks

Economists use specific methodology and assumptions when studying human behaviour and resource allocation.

(a) Distinguish clearly between a positive economic statement and a normative economic statement. Provide one example for each type of statement to illustrate the difference.

(b) Explain the meaning of the term ceteris paribus. Evaluate the importance and limitations of this assumption when economists build and apply economic models, such as the relationship between price and quantity demanded.

Write your answer out first, then check it against the worked solution.

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