MICRO - LS2 - Economics as a social science Flashcards
1
Q
Why is economics a social science
A
Theories are based on observing human behaviour
2
Q
What are models used for?
A
To help explain the economy
3
Q
How do models work and what’s the risk of them?
A
They are simplified versions - easy to analyse
However they can be seen as overly simplified and therefore inaccurate
4
Q
Ceteris Paribus
A
Assumes other variables are equal, isolated and considers one factor discounting the others
5
Q
What’s a theoretical model?
A
They are based on theory
6
Q
What’s an empirical model?
A
Based on economic data
