1.2 Economics As A Social Science

Question 1

Why do economists use models?

Answer 1

• Economists use models because they can not conduct scientific experiments
• The models are used to explain and predict economic phenomena
• Models can be used to predict the impact of economic change

Question 2

What do economists rely on instead?

Answer 2

They rely on data and assumptions to make models that can explain and predict economic phenomena

Question 3

What are the 2 types of models economists often use?

Answer 3

Theoretical models: which are based on theory

Empirical models: which are based on data

Question 4

What is Ceteris Paribus?

Answer 4

It is an assumption made by economists, it means “assuming other variables remain constant”.

Question 5

Why do economists use Ceteris Paribus when building models?

Answer 5

-We can’t control external variables
-There are lots of factors that can impact economic activity