Lesson one-Economics as a social science

Question 1

What is economics?

Answer 1

The study of the production, distribution and consuption of wealth in human society

Question 2

Economics is a social science, what does this mean?

Answer 2

Social science is concerned with society and the relationshps among individuals within a society. It has many branches, each of which is considered a social science.

Question 3

Why is economics regarded as a social science?

Answer 3

It uses scientific measures to build theories that can help explain the behaviour of individuals, groups and organisations.

Question 4

How do econimists build models?

Answer 4

Develop theories and create models to explain phenomena
Use simplifying assumptions to limit the number of variables in an investergation.
Test theries against facts
Use empirical data to improve and revise their economic models

Question 5

What do econimists use their ecomomic models to do?

Answer 5

Make predictions

Question 6

What is a main problem that econimists face?

Answer 6

Econimists cannot carry out laboratory experiments. In economics things are constantly changing making it hard to measure things accurately.

Question 7

How do econimists get around the existence of multiple variables in an economy ?

Answer 7

They use an assumption called Ceteris Paribus

Question 8

What is Ceteris Paribus latin for?

Answer 8

All other things remaining equal

Question 9

When do economists use Ceteris Paribus?

Answer 9

When looking at the relationship between two factors

Question 10

When using Ceteris Paribus what will econimists assume?

Answer 10

That only two factors will change and all other factors which would have an effect will stay the same.