What are assumptions? Why would an economist use assumptions? When you look at the word assumption you see the word assume.
Assume means to take for granted or without proof. This relates to economics because, an economist is like a scientist. Scientists use the Scientific Method to make experiments easier, and economists use assumptions to make their experiments easier. A good example could be that seat belts are in cars. Now that is not an? What you need to ask is how to continue onto that. That is the idea of assumptions. You start with something small such as seat belts are in cars and add on by saying that people would drive faster and use up more gas. Now that is an assumption. Or another assumption could be people like sports cars, sports cars drive fast, drivers drive sports cars fast, and use gasoline faster. Now that we have our assumptions we can use these hypotheses to determine the effect on the supply and the demand of gasoline
Here is another example. Government lowers taxes for corporations, corporations use extra profit to higher more workers, and unemployment rate goes down. This is an assumption of unemployment rate and taxes. None of these assumptions could be right but it gives and idea of why something might be.
So the next time you are hypothesizing use assumptions to make your life easier.
Assume definition is from http://dictionary.reference.com/
Assume means to take for granted or without proof. This relates to economics because, an economist is like a scientist. Scientists use the Scientific Method to make experiments easier, and economists use assumptions to make their experiments easier. A good example could be that seat belts are in cars. Now that is not an? What you need to ask is how to continue onto that. That is the idea of assumptions. You start with something small such as seat belts are in cars and add on by saying that people would drive faster and use up more gas. Now that is an assumption. Or another assumption could be people like sports cars, sports cars drive fast, drivers drive sports cars fast, and use gasoline faster. Now that we have our assumptions we can use these hypotheses to determine the effect on the supply and the demand of gasoline
Here is another example. Government lowers taxes for corporations, corporations use extra profit to higher more workers, and unemployment rate goes down. This is an assumption of unemployment rate and taxes. None of these assumptions could be right but it gives and idea of why something might be.
So the next time you are hypothesizing use assumptions to make your life easier.
Assume definition is from http://dictionary.reference.com/
Nice use of a hyperlink. I'm confused with your analogy to scientists. Don't they use experiments to avoid making assumptions? I also need more information with the seat belt example. How do you get from science experiments to seat belts? What, ultimately, are you trying to say with that analogy?
ReplyDeleteThis is very nice but i was getting kind of confused.you start at one thing and jumped to another just like nothing it was to confusing but other then that it was very good
ReplyDelete