Concepts
- The Role of Economic Assumptions
- Rational Behavior
- Generalizations
- Other-Things-Equal (Ceteris Paribus)
- Abstractions
Overview
The world is a very complex place with a lot of moving parts. In order to do basic economic analysis with the models and concepts taught in this class we must first learn how to mold the complex real world into something easier to understand. This is achieved through the use of assumptions. You’ll notice that some of the assumptions for any given model will not be realistic. That’s the point. We use these assumptions to take a very complex real world and simplify it in a framework where we can focus on the concepts in question.
Materials
- Lecture Notes
Lecture
Video Coming at Later Date
Quiz
No quiz on this lesson because there will not be any direct questions about this material on the AP Exam. However, these concepts are needed to understand other material that will be tested on the AP Exam so don’t overlook this lesson!!