(i) In deductive method we move from general to particular.
(ii) It is also called as analytical (or) abstract method.

(i) Positive science deals with what it is.
(ii) It is concerned with how and why.

(i) Form utility
(ii) Time utility
(iii) Place utility
(iv) Service utility
(v) Possession utility
(vi) Knowledge utility

S.No	Positive Economics	Normative Economics
1	Deals with what is, how and why	deals with what ought to be
2	Analyses a problem on the basis of facts and examines its causes.	results are not based on facts but on social, cultural, political and religious considerations.
3		it is subjective
4	(eg) if rate of interest increases we see why & how it can be reduced.	(eg) if rate of interest increases, we see whether it is good or bad

S.No	Micro Economics	Macro Economics
1	Micro Economics is that branch of economics which deals with the economic decision-making of individual economic agents such as the producer, the consumer etc.	Macro Economics is that branch of economics which deals with aggregates and averages of the entire economy. E.g., aggregate output, national income, aggregate savings and investment, etc.
2	It takes into account small components of the whole economy.	It takes into consideration the economy of the country as a whole.
3	It deals with the process of price determination in case of individual products and factors of production.	It deals with general price-level in any economy
4	It is known as price theory	It is also known as the income theory.
5	It is concerned with the optimization goals of individual consumers and producers	It is concerned with the optimization of the growth process of the entire economy.

(i) Psychological - it depends on consumer's mental attitude
(ii) Not equal to usefulness.
(iii) Is personal and relative.
(iv) Is the function of the intensity of human wants.
(v) Cannot be measured objectively; has no ethical significance.

The Problem of Choice:
(i) The problem of choice arises because of limited resources and unlimited wants, may relate to the allocation of resources between the goods for higher income group and the lower income group and the goods for defense and the civilians.
(ii) Since PPC is the locus of the combination of the goods the problem of choice will not arises when we choose any point on PPC.
The notion of scarcity:
(i) Every economy has scarce resources which can produce only limited amount of output even with the help of best technology.
(ii) PPC reflects the constraints imposed by the element of economic scarcity.
The solution of central problems:
(i) The solution of problem of what to produce involves the decision regarding the choice of location on the PPC.
(ii) Any point inside PPC indicates that the economy is using inefficient methods of production and inefficient combination of resources.
Conclusion:
(i) Thus the basic problems of the economy are solved with the help of PPC.

Nature of Economics:
(i) Nature of a subject refers to its contents, how and why they find a place in the subject.
(ii) The nature is understood by studying the various definitions given by economists.
Wealth definition:
(i) Adam Smith in his book "An inquiry into nature and causes of wealth of nations" defines Economics as a science of wealth.
Welfare definition:
(i) Alfred Marshall in his book "Principles of Economics", defines Economics as a study of mankind in the ordinary business of life;
(ii) It examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well being.
(iii) It is a study of man and wealth.
Scarcity definition:
(i) Lionel Robbins in his book "An Essay on the nature and significance of economic science" defines Economics as a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.
Growth definition:
(i) Paul Samuelson defines economics as the study of how men and society choose, with or without the use of money, to employ scarce productive resources which could have alternative uses, to produce various commodities over time and distribute them for consumption now and in the future among various people and groups of society.

(ii) Since there are many definitions Keynes observed that "Political Economy has strangled itself with definitions."
Scope of Economics:
(i) It refers to the subject matter of Economics, whether it is an art or a science.
Subject matter:
(i) Economics studies the ways in which people use the available scarce resources to satisfy their unlimited wants.
(ii) It deals with consumption, production of goods and distribution of income to the factors of production.
(iii) All human activities related to wealth is the subject matter of Economics.
Arts:
(i) Since Economics provides guidance to the solution to all the economic problems it is an Art.
Science:
(i) Economics is a science since it has similar characteristics of a science.
(ii) Economics examines the causes and effects of problems. So it is considered both an art and a science.
Positive Science:
(i) Economics is a positive science since it deals with what it is, it analyses a problem on the basis of facts and examines its causes.
Normative Science:
(i) Economics is normative science because it responds to what ought to be;