1. All sciences use simplifying assumptions

You tell someone, “It will take you 45 minutes to drive from Ames to Des Moines.”What assumptions did you make?
Weather conditionsDriving speedAdequate gas

2. We frequently ignore how things change over time in economics. This is call “comparative static analysis.” We look at a market, let the price change and determine the impact on quantity sold after the market has worked things out.

3. We assume that only one thing changes at a time. All other things are held constant. --Ceteris paribus !

An increase in gasoline prices results in lower petroleum imports -- assuming income is held constant.

4. We usually do not consider secondary effects. But there are times when they are very important.

5. We frequently think of the long run as being a year or more.