PART 2: 『Principles of Economics 5th edition』 Gregory N. Mankiw

1. Economists try to address their subject with a scientistﾁsobjectivity. Like all scientists, they take appropriate assumptions and build simplified models in order tounderstand the world around them. Two simple economic models are the circular-flow diagram and the production possibilities frontier.

2. The field of economics is divided into two subfields:microeconomics and macroeconomics. Microeconomist sstudy decisionmaking by households and firms and the interaction among households and firms in themarketplace. Macroeconomists study the forces and trends that affect the economy as a whole.

3. A positive statement is an assertion about how the world is. A normative statement is an assertion about how the world ought to be.When economists make normative statements, they are acting more as policy advisers than scientists.

4. Economists who advise policymakers offer conflicting advice either because of differences in scientific judgments or because of differences in values. At other times, economists are united in the advice they offer, but policymakers may choose to ignore it.