An economist wants to test the hypothesis that introducing a carbon tax on domestic flights reduces passenger numbers. Since they cannot conduct a controlled laboratory experiment with identical populations, they compare flight bookings in a country that implemented the tax with a similar neighbouring country that did not, whilst using statistical techniques to hold other factors constant.
This investigation illustrates that economic methodology:
is purely normative, as policy decisions regarding carbon taxes are based entirely on ethical value judgements rather than positive statement testing.
follows the scientific method of testing positive hypotheses, but is constrained by the inability to conduct controlled laboratory experiments, requiring real-world data and the use of the ceteris paribus\textit{ceteris paribus}ceteris paribus assumption.
is fundamentally distinct from natural sciences because economic models are purely deductive, meaning they do not require empirical falsification to be accepted.
proves that economists can establish absolute, universal laws of consumer behaviour that are entirely independent of social or historical context.
123 exam-style questions on AQA A Level Economics 1.1 Economic methodology and the economic problem, covering 1.1.1 Economic methodology, 1.1.2 The nature and purpose of economic activity, 1.1.3 Economic resources, 1.1.4 Scarcity, choice and the allocation of resources, and 1.1.5 Production possibility diagrams. Each one has a worked solution and a mark scheme showing where the marks go.