Readers Question: “Microeconomics involves the study of models. These are central elements of theories”. Discuss the statement by providing examples of such models.
To be honest, when studying and teaching economics I have not really placed much emphasis on the distinction between models and theories.
The models that you use will depend on which syllabus and course you are doing. These are some of the basic models you might find in A Level economics
- Price Discrimination
- Perfect Competition
- Price Mechanism
- Oligopoly and Kinked Demand Curve
- Game Theory Pricing strategies
There is a strong relationship between theories and models
The definition of a theory suggests:
Theory n A model or framework (made up of a body of principles) to explain phenomena. The word ‘theory’ derives from the Greek word ‘theorein’, which means ‘to look at’.