The scientific Method Uses abstract models to help explain how a complex, real world operates. Develops theories, collects and analyzes data to prove the theories Observation, Theory and More observation! Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Scientific Method Uses abstract models to help explain how a complex, real world operates. Develops theories, collects, and analyzes data to prove the theories. Observation, Theory and More Observation!
The Role of assumptions Economists make assumptions in order to make the world easier to understand The art in scientific thinking is deciding which assumptions to make Economists use different assumptions to answer dififerent questions Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Role of Assumptions Economists make assumptions in order to make the world easier to understand. The art in scientific thinking is deciding which assumptions to make. Economists use different assumptions to answer different questions
The Economic Way of Thinking Includes developing abstract models from theories and the analysis of the models Uses two approaches Descriptive(reporting facts, etc.) Analytical(abstract reasoning) Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Economic Way of Thinking Includes developing abstract models from theories and the analysis of the models. Uses two approaches: Descriptive (reporting facts, etc.) Analytical (abstract reasoning)
Economic Models Economists use models to simplify reality in order to improve our understanding of the world TTwo of the most basic economic models include The circular Flow model The production possibilities frontier Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Economic Models Economists use models to simplify reality in order to improve our understanding of the world Two of the most basic economic models include: The Circular Flow Model The Production Possibilities Frontier
The circular-Flow Model TThe circular-fow model is a simple way to visually show the economic transactions that occur between households and firms in the economy. Harcourt, Inc. items and derived items copyright o 200l by harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Circular-Flow Model The circular-flow model is a simple way to visually show the economic transactions that occur between households and firms in the economy