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Hey everyone, today we're answering problem 25 from chapter 1 of the textbook, which basically asks us to explain why we shouldn't characterize theories as unrealistic.
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There's really no purpose to it.
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Or it's rather unfair.
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So the steps we want to take first, we're going to want to define what a theory is.
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And then second, we're going to want to use that definition to answer the question.
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All right, so what is a theory? well, in chapter one of the reading, what we know is that a theory is a representation of an object or situation that is simplified.
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So simplified representation of an object or situation.
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That's one part of it.
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And then basically, it includes enough key features to help us understand the object or situation to help us understand said object.
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Object or situation.
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And an important advantage of a theory is that if it's well -defined and, you know, it has the model to back it up, good theories will help us see important relationships between two variables.
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All right, so now that we know what a theory is, we can better answer this question.
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So, when we're thinking about this question, why shouldn't we characterize it as unrealistic? well, clearly, when you're creating a theory, you're just trying to take a complex idea and simplify it down, regardless of whether or not it is possible.
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So whether or not the theory is possible isn't as important for economists initially.
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Because theories help economists simplify complex issues in a vast complex economy.
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It's really just trying to simplify things...