Intro To Economics Notes 2/7/02 Models(theories)
Created | Updated May 23, 2003
A model is a simplified version of the real thing i.e, abstractions from realaty.Models are neaded because reality is far to complex to see all the variables
Ingredients:
1. Definitions: all terms and concepts must be clearly defined.
2.Assumtions : state the conditions under witch the model will apply
3. Hypothoses : expres relations among variables...cause & effect relationships
4. Test-->genralizations, laws, principles
Varables
definiton: a varable is any thing that can asume difrent values:
exaples of economic varables:
price ext...
Hypothoses: the quantaty of apples that people buy depends on the price of apples.
Quantaty : dependant variable
Price: independant variable
note:
endogenous variable - value is determined inside the model
exdogenous - value is determined outside the model(exdogenous variables afect endogenous variables)
Earlier Notes A711569 Later Notes A711587
Ingredients:
1. Definitions: all terms and concepts must be clearly defined.
2.Assumtions : state the conditions under witch the model will apply
3. Hypothoses : expres relations among variables...cause & effect relationships
4. Test-->genralizations, laws, principles
Varables
definiton: a varable is any thing that can asume difrent values:
exaples of economic varables:
price ext...
Hypothoses: the quantaty of apples that people buy depends on the price of apples.
Quantaty : dependant variable
Price: independant variable
note:
endogenous variable - value is determined inside the model
exdogenous - value is determined outside the model(exdogenous variables afect endogenous variables)
Earlier Notes A711569 Later Notes A711587
