1.1- NATURE OF ECONOMICS Flashcards
1
Q
What is economics?
A
the study of how to best allocate scarce resources amongst alternative needs and wants
2
Q
What is ceteris paribus?
A
‘all other things remaining equal’
3
Q
Why do economists develop models?
A
Economist develop models to explain how the economy works e.g supply and demand and circular flow of income
These are developed by putting forward a model , gathering evidence and then accepting ,changing or disregarding the model
There are too many variables which can change within a economic model and so assumptions can be made
