Economics as a Social Science

Question 1

What is Economics in scientific terms?

Answer 1

Scientific study of ownership, use and exchange of scarce resources
(Science of scarcity)

Question 2

How does economics use scientific methods?

Answer 2

To build theories that can help explain the behaviour of individuals, groups and organisations

Question 3

What do economists do?

Answer 3

Formulate theories and collect evidence to test them against an alternative idea

Question 4

How do economists collect evidence?

Answer 4

Employ different methods, mainly based on observation and deduction
Construction of models to look at impact

Question 5

What does a model describe?

Answer 5

Behaviour of economic variables (influencing factors)

Simplified view of complex relationships and processes

Question 6

What is Ceteris Paribus?

Answer 6

All other things being equal/remaining constant

Question 7

What is the assumption you make in Ceteris Paribus?

Answer 7

Nothing has changed except one variable you are studying

Question 8

Why do we use Ceteris Paribus?

Answer 8

It simplifies the problem
Economic variable are constantly changing
Helps explain link between economic variables