1.1.1 + 1.1.2 Economics as a social science Flashcards
One definition of economics
Investigates how scarce resources are allocated to provide for unlimited wants.
What is the scientific method?
This is where scientists put forward a hypothesis.
They gather evidence.
They accept, modify or refute theory.
Theories which gain universal acceptance are called laws.
What is Economics and what does it study?
Economics is a social science which is concerned with the study of human behaviour.
Economics investigates how scarce resources are allocated to provide for unlimited wants.
What is a social science?
A group of academic disciples dedicated to examining human behaviour and specifically how people interact with each other. Behave, develop as a culture and influence the world.
In what way does economics / social science differ to scientific method?
There are no control groups which allow one factor to be varied whilst others are kept constant.
Studies human behaviour which is difficult to predict.
Different interpretations
Couched in terms of probabilities eg - it is likely that…
What are theories, models and assumptions in economics?
Usually diagrammatic or mathematical
These are simplified versions of real life problems
They are based on assumptions and they also need to be useful to the economists.
What is a model in economics?
A model is a theoretical concept that looks at how different variables interact. They use both qualitative information and statistical data.
They often use empirical (real world) information to help evidence outcomes.
This allows us to observe how a change in one variable will impact on other variables.
What is the concept of Ceteris Paribus?
This is the assumption that holding other things constant or all other things being equal.
This is used to isolate the effect of a specific variable while keeping other relevant factors constant.
What is the Law of Demand?
This principle states that all other things being equal, when the price of a good or a service decreases, the quantity demanded also increases and vice versa. Here ceteris paribus helps isolate the impact of price changes on quantity demanded.
What is a positive statement in economics?
This is a statement which is scientific of the subject. It is testable which means that it can be supported by evidence or refuted.
What are normative statements in Economics?
These statements are concerned with value judgements which are usually about policy.
These statements cannot be supported or refuted and are instead just opinions from people on what they think is right and wrong.
