1.1.1 - Economics as a social science

Question 1

Why is economics a social science?

Answer 1

Attempts to use the scientific method and apply it to the study of certain aspects of human behaviour

economics is not a science as it studies human behaviour, which cannot be reduced to scientific laws

Question 2

Explain the scientific method

Answer 2

Involves:

. Observation and measurement of data

. Analysing data discover patterns and relationships between variables

. Models and hypothesis can be formed

. Theories put forward can also be refuted or accepted.

Question 3

Difficulties in applying scientific method to economics

Answer 3

. Human behaviour is unpredictable and changes. It makes it hard to predict e.g. how consumer confidence may affect saving or spending

. Economic data is incomplete, inaccurate or hard to measure e.g. GDP and unemployment data

. Difficulties carrying out experiments under controlled conditions to test a hypothesis.

Question 4

Define model

Answer 4

assumptions based on observations and measurement of the behaviour of economic variables (e.g. rate of inflation, unemployment)

Question 5

Purpose of model

Answer 5

.To make predictions about the future course of the economy

. To allow policy makers to find ways of improving economic performance

. To simply and visualize easily

Question 6

Critisims of models

Answer 6

. Unrealistic as they are too simplified

. Some factors distorted to emphasise particular points in the model

Question 7

Define ceteris paribus

Answer 7

‘all other things being equal’

Question 8

Define another word for model

Answer 8

Theory

Question 9

Explain why scientist use ‘ceteris paribus’

Answer 9

.Scientists need to make assumptions when developing models or theories so they assume ‘all other things being equal’.

. ‘Ceteris Paribus’ helps to simplify the problem