Learning Objective To discuss the concept of the scientific paradigm of economics According to Wikipedia, the paradigm is a distinct set of concepts; thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field. Paradigm is a means of looking at something. In such a sense new paradigm means […]
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The article will discuss the meaning and some key importance of assumptions, hypothesis, and empiricism in the study of economics. Meaning of Assumptions in Economics Economists apply assumptions to split down composite and complex economic phenomena and processes and advocate different theories to recognize and understand different economic variables. Assumption can be defined as some
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Learning Objective To explain hypothetico-deductive method of scientific study Meaning of Hypothetico-deductive Method Hypothetico-deductive method also called H-D method is an approach to research or a method of construction of a scientific theory that will account for results procured through direct observation and experimentation and that will, through inference, forecast additional effects that can then be verified or disproved by empirical verification derived
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The degree of income elasticity of demand for different types of goods is different. So, it is imperative to quantity the income elasticity of demand for the business decision as well as other policy-related decisions. Economists have suggested different methods to compute the income elasticity of demand. The following are the major methods used in
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The degree of price elasticity of demand for different goods is different. So, it is important to measure the elasticity of demand to compare the elasticity of demand for different goods. Economists have developed different, methods of measurement of price elasticity of demand. Here we will discuss all the major methods of measurement of price
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In economics, we believe that the equilibrium of supply and demand in the market maximizes the total benefits received by sellers and buyers. Similarly, the price that balances the supply and demand for the product is the best one as it maximizes the total welfare of consumers and sellers or producers. So, economists consider a
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Meaning of Subsidy A subsidy may be defined as the financial help granted to the producers or the consumers of subsidized commodities. Similarly, a subsidy may be in the form of a production subsidy and user subsidy. The subsidy is the opposite of the tax. It is also one of the significant policies of the
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Introduction to Induction and Deduction There are two methods of reasoning the deductive method and the inductive method. Both the methods are forms of logic that help to establish the truth. It means generalization can be drawn by using these two methods. During scientific reasoning, true logic can be stressed through deduction as well as
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The inductive method refers to the process of reasoning from part to the whole, from specific to general, from narrow to wider, and from individual to the universe. Bacon described it as an ascending process in which facts are collected; arranged and then general conclusions are drawn. It is also called the empirical, historical, and
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Methods of Analysis Economic laws or generalization states the relationship between economic variables. Economic theory provides an explanation of the stated relation between the variables. It means economic theory brings out the logical reasoning and logical basis of generalization. An economic theory deduces generalization through the procedure of logical reasoning and explains the condition under
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