Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 21.1, Problem 2Q
To determine

Use of inductive models by the modern economists.

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Why is it important for us to use models when studying economics?
Economic behavior is more complex than assumed by conventional economic theory. Political economy explains the functioning of government. Behavioral economics ties psychology into human behavior. Economists assume that individuals make rational decisions. However real people are more complex. Based on what you have learned in your assigned reading, answer the following questions in your initial post: What are the human behaviors economists should observe when creating economic models? Example: people tend to find solutions that are good enough, but not the best solutions. In your responses, comment on at least two of your peers' posts and share example of how non-rational human behavior can change an economic outcome.
What is the difference between static and dynamic analysis in economics?  When is each appropriate?
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