ECON 1011 Chapter Notes - Chapter Text 3: Bloomington, Indiana, Tacit Assumption, Inductive Reasoning

• School: GWU
• Department: Economics
• Course: ECON 1011
• Professor: Suranovic Steve

Document Summary

Standard approach in economics use deductive or inductive reasoning. Deductive reasoning set of assumptions and use these to figure out certain outcomes: uses logic to follow the assumptions, if all men are mortal, socrates is a man, then socrates is mortal. Inductive reasoning uses observations collected from the world: uses the outcomes to infer the causes of the specific outcomes, if water is a solid less than 0 and liquid above it, freezing point is 0. Unstated / implicit assumption assumptions that are so obvious, they are not stated. Assumptions that simplify vs. assumptions that reflect reality. Some assumptions are made to simplify things, others are critical for function of certain models. Difference is the side of a statement: if a, b, c are true, then x, y, z follow statements on left are assumptions, statements on right are implications. Makers of certain models only state assumptions necessary to understand the material.