Methods and Models Flashcards
1
Q
3 Principles of Economcis
A
- Optimization
- Equilibrium
- Empiricism
2
Q
What is entailed in optimization?
A
Scarcity, consumers and producers, opportunity cost, on margin…
3
Q
What is entailed in equilibrium ?
A
Markets adjust, price takers, no one has influential power, no benefit for an individual to change their behaviors
4
Q
What is entailed in empiricism?
A
Empirical analysis, data to test hypothesis; correlation v causation
5
Q
Positive
A
How things are, natural state
6
Q
Normative
A
How things SHOULD be (not testable)
7
Q
What is Economics?
A
The study of people’s choices in the face of scarcity
