Skip to content

1.1.1 Economics as a Social Science

The Scientific Method

In most sciences, a scientist may postulate a theory, gather evidence to support it, and then they (or others) may accept, modify or refute the theory.

Theories that gain universal acceptance are therefore often called laws (e.g., the Law of Diminishing Marginal Utility in Economics)

However, establishing laws in Economics is slightly more difficult because:

  • you cannot simply set up a lab experiment - Economics is real life, and
  • data has to be gathered from ordinary and many data sources, and
  • said data must be applicable to many different areas

Economic models are used for finding out / predicting why something is, as it is.

Keyword

The first keyword to know for Economics is ceteris paribus.