ECO 211 Chapter 2: Chapter 2
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ECO 211 Full Course Notes
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Scientific method--the ongoing process that economists & other scientists use to 1) develop models of the world & 2) test those models with data. Model/theory--a simplified description or representation of the world. Even models based on assumptions known to be false can be helpful (i. e. , a map) Data--facts, measurements, or statistics that describe the world. All scientific models make predictions that can be checked with data. Empirical evidence--a set of facts established by observation & measurement. Hypotheses--predictions (typically generated by a model) that can be tested with data. Economic models begin with assumptions, which are then used to derive other implications. Two properties of models: a model is an approximation & a model makes predictions that can be tested with data. The model usually overlooks lots of special considerations. Mean/average--the sum of all the different values divided by the number of values.