IB Economics — How do economists approach the world?

Key Idea: Topic 1.2 explains **how economists think**: they build **models**, use **assumptions** like ceteris paribus, distinguish **positive from normative** statements, and acknowledge the **limitations** of their tools.

✅ Core definitions

Look for 'should', 'ought to', 'better', 'fairer' — these signal **normative** statements. A positive statement doesn't have to be TRUE — 'the moon is made of cheese' is positive because it CAN be tested.

🔬 Why economists use models

📊 Positive vs normative — the key distinction

⚠️ Limitations of economic models

🤷 Why economists disagree

Strong exam structure: 'This model predicts X, however in reality Y may occur because the assumption of Z may not hold.' This earns evaluation marks consistently.