methodology of economics

The methodology of economics involves studying how people make choices about using limited resources to satisfy their wants and needs. Economists observe real-world data, formulate theories, and develop models to understand behaviors and market outcomes. They analyze factors like prices, preferences, and incentives to explain patterns in production, consumption, and trade. This approach combines empirical evidence with logical reasoning to generate insights that can inform policies and improve economic decision-making, always acknowledging complexity and uncertainty inherent in human behavior and markets.