Economics as a Social Science

Question 1

How is economics a social science?

Answer 1

• Deals with human society and behaviour.

- Uses the social scientific method.

Question 2

Explain economists are model builders.

Answer 2

• Models: closely related to theories and laws.
• Theory: tries to explain why certain events happen and make predictions.
• Law: concise statement of an event which is supposed to have universal validity.

Question 3

Explain ‘ceteris paribus’.

Answer 3

Means ‘other things equal’. Another way of saying that all other things are assumed to be constant or unchanging.

Question 4

Explain ‘rational self-interest’.

Answer 4

Individuals are assumed to act in their best self-interest, trying to maximise the satisfaction (utility) they expect to receive from economic decisions.

Question 5

Define ‘microeconomics’

Answer 5

Studies the behaviours of individuals within an economy; consumers and producers in particular markets.

Question 6

Define ‘macroeconomics’

Answer 6

Studies the total effect on a nation’s people of all economic activity within that nation.