1-Introductory concepts Flashcards
1
Q
How is economics a social science?
A
It studies the human behavior. It does not conduct scientific laboratory experiments. They examine what has already occurred to test theories
2
Q
Define Theories and Models
A
Models or Theories are simplified representation of the real world
3
Q
Use of Assumptions in building models
A
ceteris paribus assumption = (other things being equal)
4
Q
Define Positive statement
A
Objective statement and are based on Facts or Evidence
5
Q
Define Normative statement
A
Subjective statement and are based on value judgements. They may use - Should, fair
