What you’ll learn to do: explain how economists use economic models
Earlier we defined economics as the study of how people choose to use scarce resources to best satisfy their unlimited wants. Economists try to analyze these choices both at the individual level (What wage does Alissa require in order to take that job?) and broader societal level (What is the impact of minimum wage on the unemployment rate?). The principal tool economists use to do this is models.
In this section, we’ll define models and show how economists use them.
The specific things you’ll learn in this section include the following:
- Define an economic model
- Explain why economic models are useful to economists
- Identify common economic models
The learning activities for this section include the following:
- Video: Economic Models and Theories
- Reading: Using Economic Models
- Self Check: Economic Models