Microeconomics Chapter 2 (Pearson Series in Economics)

The name for the ongoing process that economists and other scientists use to (1) develop models of the world and (2) evaluate those models by testing them with data. (21)

A simplified description of reality. Sometimes economists will refer to a model as a theory. These terms are usually used interchangeably. (21)

Consists of facts that are obtained through observation and measurement. Also called data. (22)

Predictions (typically generated by a model) that can be tested with data. (23)

The sum of all the different values divided by the number of values. (25)

Value calculated by ordering the numbers from least to greatest and then finding the value half-way through the list. (25)

When one thing directly affects another. (ex.) Turning on the stove causes the water in the kettle to boil (26)

A changing factor or characteristic.

Two variables tend to change at the same time. (27)

When two variables tend to move in the same direction. (ex.) marriage rates and income (27)

Implies that two variables tend to move in opposite directions. (ex.) education level and employment (27)

When variables have movements that are not related. (28)

Something that has been left out of a study that, if included, would explain why two variables that are in the study are correlated. (ex.) ice cream, drowning actually caused by summer (28)

When researchers confuse the direction of cause and effect. (ex.) Wealthy people are healthier bc they can afford healthcare -OR- bc healthy people can work more so they can get more money (28)

A controlled method of investigating casual relationships among variables. (29)

The assignment of subjects by chance, rather than by choice, to a treatment group or a control group. (29)

An empirical study in which some process--out of the control of the experimenter--has assigned subjects to control and treatment groups in a random way or nearly random way. (ex.) researcher studying why some cities were bombed in the Vietnam war (30)

Displays data at different points in time. (37)