Google
Friday 
June 14, 2024 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
OWNERSHIP LIABILITY: The extent to which the owners of a business are liable for the debts of the company. The two basic liability alternatives are unlimited liability, which has no restrictions on ownership liability, and limited liability, which does have restrictions. Ownership liability is one characteristic separating legal business organizations. Proprietorships and partnerships have unlimited liability. Corporations have limited liability.

Visit the GLOSS*arama


THEORY:

An empirically verified, interrelated body of general principles, axioms, and assumptions that is used to explain and understand real world phenomena. Theories are the cornerstone of the scientific method. They generate the hypotheses that are verified against real world data. The construction and refinement of theories, accomplished through the hypothesis verification process, is the primary goal of doing science.
A theory is both the "starting point" for doing science and the "end product" of the scientific method. A theory creates a framework for investigating and explaining the world. It helps make sense out of the happenings of the world by explaining WHY things happen.

A Spotlight

A theory places the scientific spotlight on specific phenomena to be studied. A theory of the market, for example, places the scientific spotlight on voluntary exchanges. A theory of business cycles places the spotlight on macroeconomic instability. The focus provided by different theories establishes order for the scientific method and creates an agenda for continued scientific scrutiny.

Universal Explanation

The best theories are those offering universal explanations about the world. A theory that explains ALL types of consumer behavior is better than one which ONLY explains how consumers behave when on roller skates. In fact, the scientific method is best thought of as the process of identifying general principles that operate WITHOUT exceptions.

The Building Blocks

When building a theory, two types of general principles are involved. Both are essential.

  • Verified Principles: These are principles that have been confirmed through the hypotheses verification process. These are THE fundamental laws of nature that science seeks to identify. The law of demand is perhaps the most noted verified principle in economics and the theory of markets. Although it began as a hypothesis many decades ago, economists have tested and verified it time and time again.

  • Unverifiable Axioms: These are beliefs and values that cannot be directly tested against real world data. Axioms are basic, unverifiable world view assumptions, including personal beliefs, political views, and cultural values, that form the foundation of a theory. One common example of an unverifiable axiom is belief in a supreme being. In other words, God's existence cannot be directly verified. Virtually every scientific theory contains such unverifiable axioms.

A World View

The unverifiable axioms that make up a theory, more often than not, capture a larger world view. This world view generally reflects a specific religious belief, political orientation, and overall philosophy of life. One world view might be the notion that humanity is essentially the "center of the universe." A contrasting world view might be that humanity is nothing more than "an inconsequential speck" floating through the universe.

And Some Politics

Unverifiable axioms comprising theories are also intertwined with political views. With the ever present policy implications of economics, world views are probably as important to economic theories as they are to any other scientific discipline. The basic belief axioms of an economic theory inevitably include world views about the political system, individual freedoms and responsibilities, the nature of humanity, and the role of government.

In particular, while political conservatives have one world view, political liberals have another. These world views are, more often than not, polar opposites. They also reflect philosophical beliefs that are not directly testable.

Perhaps most important of all, an economic theory is generally built upon some sort of political philosophy and world view. That is, they can be characterized as reflecting either a conservative or liberal political view. The underlying political views then influence normative economic policy recommendations implied by the theories.

<= TERMS OF TRADETHIRD-DEGREE PRICE DISCRIMINATION =>


Recommended Citation:

THEORY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: June 14, 2024].


Check Out These Related Terms...

     | hypothesis | verification | principle | abstraction | world view | data | empirical | model | phenomenon |


Or For A Little Background...

     | scientific method | science | political views | assumption | cause and effect | positive economics |


And For Further Study...

     | economic thinking | dismal science | economics | seven economic rules | fallacies | seventh rule of complexity | economic analysis | social science | fallacy of false cause | normative economics | consumer demand theory | short-run production analysis | factor market analysis | aggregate market analysis | Keynesian economics | monetary economics |


Search Again?

Back to the WEB*pedia


APLS

BROWN PRAGMATOX
[What's This?]

Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway seeking to buy either a birthday greeting card for your father or a T-shirt commemorating the first day of spring. Be on the lookout for rusty deck screws.
Your Complete Scope

This isn't me! What am I?

Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
"Intense concentration hour after hour can bring out resources in people they didn't know they had. "

-- Edwin Land, inventor, entrepreneur

M3
M2 plus investment types of near monies, including large denomination certificates of deposits, institutional money market deposits, and longer term repurchase agreements and Eurodollars
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2024 AmosWEB*LLC
Send comments or questions to: WebMaster