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What is Economic Theory?
An economic theory that can be considered an axiomatic approach comprise a set of assumptions and circumstances, an analytical framework and explanations and/or predications as conclusions which are derived by the assumptions and the analytical framework.
As any science, economics is relate along with the explanation of observed phenomena and also creates economic predictions and assessments based onto economic theories.
Economic theories are improved to describe the observed phenomena into terms of a set of fundamental assumptions and rules.
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Sita expects her future earnings to be worth Rs. 100. If she falls ill, her expected future earning will be Rs. 25. There is a belief that she may fall ill with probability of , -
quasi rent theory
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