Do social sciences and natural sciences share commonalities? Why or why not?

Is there a lot of room for grey/common area in between the two schools of economics? If so, what are some major grey areas?

A social science is a field of science (the study of how the world works) which concerns itself with complex social systems; man-made constructions that are critical to our everyday lives. Some examples of social sciences are: anthropology, the study of human social interaction; criminology, the study of the criminal in society and the handling of the criminal thereafter; and, most importantly and relevantly, economics, the study of systems of value and how goods and services are produced, distributed, and consumed. Its important to be cognizant as to why social sciences are different from the other sciences such as chemistry and biology; they are not part of the natural environment as untouched by the sentient human identity. They are, in fact, a direct product of our sentience. That is to say that because we are self-aware beings, we create systems in which to operate. From hence is where social science draws meaning: we have built such complex systems that we ourselves cannot fully comprehend every nuance, and therefore require a scholarly sector dedicated to the progressive apprehension of such complexity. There are two distinct schools of the science of economics: macroeconomics and microeconomics. Macroeconomics concerns itself with the big picture, as it were. It attempts to makes sense of large scale economics; things like communities, countries, international relations and their role in economics, international economics and the like. Microeconomics concerns itself with the individual and/or the family and the role macroeconomics and various other factors have in affecting them in a highly dichotomized global society centered around value. Essentially, these two separate divisions of economics have a part:whole relationship. One is like the parent, the other the child. Though they share a common goal, theyre not one and the same; however, they both operate within each other to some extent. Growth, development, and sustainable development are all concepts which an economies attempt to achieve. Growth is essentially growth in the traditional sense but applied to the idea of the economy; this means that the economy expands and matures with time and resources,

Is there any such thing as a positive statement with normative components? Vice versa?

When else can we use this phrase in economics?

as a sort of unavoidable function (granted, some economies just collapse, but that happens because of intervening roadblocks) Development is sort of the same idea, but its applying the finances from a growing economy to the infrastructure that operates under said economy. Sustainable development is exactly what it sounds like: the carefully planned and controlled process of developing for the long-term, and not just spending development quickly on short-term benefits. All three have their basis in each other: without growth, there could be no development; without development there could not exist a sustainable form of development; and without sustainable development, there can be no growth. These principles of economics have, arguably, a lot to do with opinion versus fact. The way we categorize the two opposite types of statements is through two fairly simple words: normative and positive. Normative statements are the opinion side of the coin: its used to describe a statement which passes judgment on a potential action or outcome (e.g. saying we should kill squirrels because theyre jerks). Positive statements are on the fact side: theyre statements about quantitative qualities of something (e.g. the CEO of ford owns 40% of his companys stock) Ceteris Paribus is an important phrase in economics; its meaning is all else held constant. The context in which this phrase most often appears is in one of economic problem solving. A good example of where this phrase is used would be in the construction of a production possibility curve: when you make one of these graphs, you must assume that there is not/will not be a shortage in the resources required to make the products on the axes, as it would change the graph. What you would then say is: ceteris paribus, these are the production possibilities for these two products. Scarcity is the idea that in global society there is more wants (for goods, services, products) than the world has resources to supply. This results in an inherently unequal distribution of resources and therefore wealth in the

Do we always operate under this analysis of good/bad?

How do we indicate economic growth graphically?

world, as because there is scarcity, the places with the most resources available to satisfy wants will prosper the most (they will sell the most goods and services by pure quantity alone). Scarcity therefore lends itself to the idea of production and what matters most in production (this helps us determine who has the biggest advantage in producing goods and services). Economists have determined 4 main factors that play in production: land: which is the raw materials it takes to make a product (e.g. silicon for a computer); labor: raw human power and the exertion of work to make a product; Capital: a resource made by humans to produce more goods; and entrepreneurship: risks and incentives to pursue new goods, services, and wants. Utility is the word that is used in economics to describe the satisfaction we receive from consuming a good or service (comes from alternate sources too, but only these 2 apply to utility in economics). Utility is measured by the unit of 1Util. It is upon utility which opportunity cost is based: economists believe that humans are creatures of utility and the basis of our decisions is rooted in how many Utils we get out of doing said activity (there are some exceptions to this). This is where the idea of opportunity cost comes in: opportunity cost is defined as the number of Utils or benefits you give up when choosing to do another activity (e.g. giving up eating a pizza to eat deep fried batter on a stick) An economic good is any object that has some kind of value to consumers and can be sold by producers for any price in a market. Its important not to get this confused with an economic service because that has to do with the buying and selling of human time/labor in a market, and is not depedent around material goods We measure economic growth and output possibilities on something called a Production Possibility Curve (PPC). Its a chart that shows, with a given amount of two resources, what can be produced with maximum efficiency, like so:

Production Possibilities Curve

100 80 60 40 20 0 0 5 10 15 Production Possibilities

What kinds of rationing systems are there?

What other questions, besides the big 3, can we answer in economics?

This curve shows all possible outputs for the products on the x and y axis (they can be nearly anything as long as increased production of one trades off for decreased production of the other). We show growth on this by plotting a second line above the initial one and drawing arrows from the initial to the new line. Any point below the line is also a possible output, but it does not maximize resources and/or efficiency. A Rationing system is the way a government or economy decides to distribute goods and service amongst the people living under said system. The different types of rationing systems favor people in different positions; some do not favor any one class or [economic] type of person (e.g. communism). It all truly depends on how the economy is being run In economics there are 3 basic questions that all economists aim to answer for every situation: What to produce? How to produce? For whom to produce? The general answer to each of these is obvious (consumers, with labor, and consumers, respectively), but the idea is that the answer to each of these questions can change to fit any system. These questions are essentially the way to describe the foundation of any type of economy without getting into normative questions like Why to produce? or anything similar to that.

Is there a type of economy that is objectively more morally right than the other?

What kind of economy does the United States have?

In the world, there is no true kind of pure economy; every system is permuted in some form of hybridized economic system. We can isolate numerous pure ideals that have been permuted (though they dont necessarily exist in their untouched state). Some ways economies can operate (in other words, some types of economies are): o Public economies are very similar to what we have in the US now; there is a market, and there is government control of said market. The more pure system I would liken it to would be socialism because there is definitely more public ownership in a public economy than what the US currently looks like o Private economies are completely controlled by entrepreneurs: they are totally privately owned, but their goods and services are open to the respective markets in/for which they produce. The US is also somewhat similar to this one, because we have a rather large private sector, but again, its also not quite the same because we do have some government ownership of assets. o These two ideas also have separate names that define them better with more accurately descriptive phrases: we have public being a centrally planned economy and private is essentially a free market economy, and both phrases are defined in the same way that their respective economy types are. There are a few important differences to note between: centrally planned economies, as mentioned above, are 100 percent controlled by the government, whereas free market ones are owned entirely by private enterprise. Centrally planned economies also have a radically different distribution method: they either under or over produce the number of goods the planners thinks the citizens will need and then ships the product; after the products have been distributed, the distributors communicate what about the products needed to change with the planners, and the planners adjust accordingly. In a free market system, however, the consumers decide which goods and services are needed most

Can you think of some more major examples of economy shifts?

What happens with taxes in a free market system?

through buying patterns; the corporations/goods and service makers will profit more off their product if it sells well, and attract more entrepreneurs to their sector of the market. This also shows us the third major difference: the system of rationing each system uses. Its obvious that central planning uses something other than price rationing to decide who gets which goods and services, so we say that it has a non-price rationing system. Free market systems, however, rely entirely on consumers and the buying and trading of goods and services and their values to decide who gets what commodities. This is a direct representation of a price rationing system. o There have been a couple major examples showing us what happens when a government tries to shift from one of these systems to another; to name two: Russia and China. They each had different reactions to the transitions made, and different outcomes. Firstly, China decided to shift to a price rationing system, and as such they essentially said that everyone who was staying on x plot of land or ran x factory now OWNED that piece of the economy. This was a rather easy thing for them to do, because at the time they were still a largely unindustrialized country and didnt have problems with huge factories or corporations being divided. Russia, however, was a rather interesting case. They couldnt exactly do what China did because their economy was largely industrialized, and they had a lot more issues with distribution of wealth and factors of production post-USSR. They ended up stabilizing the economy as a free market system after a long period of economic and political conflict internally. Taxes and ways of determining how much of your income the government gets is also something important to having a country with a mixed economy; finding the right balance is important for both ethical (e.g. not screwing the poor) and logistical (e.g. having enough money to actually have public education) reasons. Because taxes are and

Can there be a mixture of direct and indirect taxation in an economy?

What method of taxation do we see most prominently in the U.S.?

have always been so indispensible to the functioning of a government, economists have come up with several different methods of taxation they see present in modern and past economies: o First, we have the idea of direct taxation: when the government charges you for taxes directly from your income (e.g. you pay 18% of your income from every check you get to the economy). This system is usually present in non-governmentcentric economies because its a way the government can collect fees to still function without interfering with the prices of privately owned goods and services. o Next, we have indirect taxation: when the government places taxes on things at the point of consumption or in other places that dont involve direct payment to the government (like maybe a huge tax on buying only boats or something). We see this kind of tax used in both types of economies, really, but it seems to have a stronger presence in economies like in China (where the government is attempting to take a decreased role in consumption). There are 3 major methods in which taxes can fluctuate according to relative income: o Progressive Taxation is a taxation method that takes income into account income. The general rule for progressive taxation is that as income goes up, the tax rate you pay goes up. The U.S. uses progressive taxes for the current income tax system; its the reason why our tax brackets exist. o Proportional Taxation is a method of taxation in which taxes do not change no matter what income level youre at. An example of this would be the idea of a flat-rate income tax (as some people currently advocate for the U.S. to move towards) where, no matter what tax bracket youre in, you always pay x% of said income to the government. o Regressive Taxation is a method in which as your income rises, the percentage of it that you pay actually drops. A prime example of regressive taxation is sales tax: in this system, you pay x% tax

Can sales tax also be progressive? Proportional?

on whatever you buy/consume. So lets say someone who is rich and someone who doesnt make all that much money are going to buy the exact same bed, with the exact same 20% sales tax on each bed. They both pay the same price, but the poorer person actually paid a higher portion of their income towards the bed and such payed a higher portion of their income to the tax on the bed. o Transfer Payments are a method of direct taxation in which citizens under the government essentially send in check that the government can collect and cash for taxes. The U.S. partially operates on this system with social security taxes and unemployment benefits taxation. Its pretty much the most direct way to tax that exists, as youre literally handing the government your money.

What other ways do we pay income tax?

Explain the three major methods of taxation and how they relate to how an economy functions. Then, decide which you think is a better idea. Defend your position. What is scarcity and how does it lend itself to economics? Explain why, in your opinion, economies exist and how this relates to scarcity.