Question

1. Is economics a science? Why, or why not? As part of your response and explanation, include the definitions of “science” and “economics” as you understand them.

2. Create an economic model of rational crime.

For example, imagine a burglar is deciding which house to break into or a car thief is deciding which car to steal.

• Explain assumptions of rationality by individuals or firms.
• What factors would a rational criminal take into account in deciding to commit a crime? Be sure to explain how economic models are used by economists to assess the example.
• What would convince the criminal to do the deed? Explain the circumstances that would convince the criminal to do the deed. Address the concept of marginality and use your calculations of marginal changes as justification.
• What are some policy implications of your economic model of rational crime? In other words, what does your model predict would cause an increase and a decrease in crime?
• Use the distinction between positive and normative reasoning to explain the limits to using your economic model of rational crime to argue for capital punishment as punishment for burglary or car theft.

Answer 1

Answering only first question as per HomeworkLib policy :

Question 1).

A science is defined as a way of thinking that emphasizes putting forward basic hypotheses and then doing controlled experiments that are set up to distinguish in stark relief whether each hypothesis is right or wrong.

Economics is generally regarded as social science, as it shares the combination of qualitative and quantitative elements common to all social sciences.

Hence Economics is the science which studies human behavior as a relationship between given ends and scarce means which have alternative uses.

Economists use statistics and mathematical theories to test hypotheses and forecast trends, a process known as econometrics.

With the advent of neo classical economics, increased reliance on mathematical models to study the economy.

Both new classical and new Keynesian economics assume individuals and businesses make rational decisions, & build economic models based on scientific principles.