1.1.1: Economics As A Social Science

Question 1

What are the aims of economics?

Answer 1

-Increase economic and social welfare.
-Provide suggestions for how to deal with the economic problem (shortage of resources and unlimited wants).
-Predict certain outcomes with different economic models.

Question 2

What are some difficulties of economics?

Answer 2

•Information gaps (e.g. how a firm responds to a rise in oil prices).
•Difficulty in controlling variables (e.g. how consumers would react to a rise in oil prices).
•Economics isn’t an exact science (e.g. there are many variables that can’t be controlled).

Question 3

What is Ceteris Paribus?

Answer 3

All other things being equal.

Question 4

What is an example for Ceteris Paribus?

Answer 4

How price affects demand (e.g. higher oil prices should lead to less demand for oil).

Question 5

What does a social science study?

Answer 5

Human behaviour.