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The Art and Science of Economics

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The document discusses key economic concepts including scarcity, resources, economic decision makers, and markets. It explains that economics examines how people use scarce resources to satisfy unlimited wants. Resources include labor, capital, land, and entrepreneurial ability. Goods and services are scarce because resources are scarce. Households, firms, and governments are the main economic decision makers.

TechnologieÉconomie & finance
1  sur  24
The Art and Science of Economics ,[object Object],© 2006 Thomson/South-Western
The Economic Problem ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Resources ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Labor and Capital ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Land &Entrepreneurial Ability ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Payments for Resources ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Goods and Services ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Free Goods ,[object Object],[object Object],[object Object]
Economic Decision Makers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Markets ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Exhibit 1: Circular-Flow Model ,[object Object],[object Object],[object Object],[object Object]
Rational Self Interest ,[object Object],[object Object],[object Object]
Time and Information ,[object Object],[object Object],[object Object]
Marginal Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object]
Micro and Macro “economics” ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Science of Economic Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object]
Exhibit 2 The Scientific Method 1. Identify the Question and Define Relevant Variables 2. Specify Assumptions or 3. Formulate a hypothesis 4. Test the hypothesis Reject the hypothesis Use the hypothesis until a better one shows up Modify Approach
Scientific Method ,[object Object],[object Object],[object Object],[object Object],[object Object]
Formulate and Test Hypothesis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Normative versus Positive ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Predicting Average Behavior ,[object Object]
Pitfalls of Economic Analysis ,[object Object],[object Object],[object Object],[object Object]
Pitfalls of Economic Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object]
Ignoring Secondary Effects ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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The Art and Science of Economics

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  • 17. Exhibit 2 The Scientific Method 1. Identify the Question and Define Relevant Variables 2. Specify Assumptions or 3. Formulate a hypothesis 4. Test the hypothesis Reject the hypothesis Use the hypothesis until a better one shows up Modify Approach
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