Economics as a Social Science Flashcards
What is a social science?
human society & social relationship
how societies function & are organised
What is the social scientific method?
- observe & select economic Q
- identify variables
- make hypothesis
- make assumptions
- test hypothesis (via real world data / econometrics)
- compare hypothesis wt real world life outcomes
What are assumptions made for the social scientific method?
ceteris paribus = other things equal / everything else remains unchanged
rational self interest = ppl. are doing things to have the greatest possible self satisfaction
What are models?
usually visual & closely relate to theories & laws
e.g. diagram
equations
NOT ALWAYS relate to theory or law
e.g. PPC
What are theories?
tries to explain why certain events happen & to make predictions
What are laws?
a concise statement of an even that is supposed to have universal valididty
What is the difference between positive and normative statements?
positive = evidence based (what economists like)
normative = value judgement / opinion based
cannot be tested
words used: SHOULD & OUGHT TO
must come into decision making tho
What is the difference between macro & microeconomics?
macro = total effect on a nation’s people
micro = behaviour of individuals & markets
What are some examples of macro concerns?
total output
average price level
un / employment
income distribution
What are some examples of what macro examines?
national markets
national supply & demand
gov. taxes
unemployment & inflation
econ. growth & development
international trade
What are some examples of what micro examines?
individual markets
behaviour of firms
allocation of land, labour & capital resource (FACTORS OF PRODUCTION)
supply & demand
efficiency of markets
profit & utility maximisation
competition
market failure
What are the 4 economic systems?
traditional
command
market
mixed
