1. The Scientific Method

2. Necessary & Sufficient Conditions
A is said to be a sufficient condition for B. If A happens B will be guaranteed to occur.
EX: Ceteris Paribus, if it rains then the football field will be wet. Necessary & Sufficient Conditions.

3. Testing Causality
If A is observed and ceteris paribus B does not occur then the idea that A causes B is called into question.
EX: Theory: C.P. Price is negatively related to quantity demanded.
We observe price falling and ceteris paribus quantity demanded also falls. Does the data support the theory?

4. Testing Causality
Econometrically we can estimate an equation for demand.
Q = f(Price, Income, Other Variables)
What is the predicted sign on the coefficient of price? (Is it significant?)

5. Fallacies Denying the antecedent: Affirming the consequent:
It did not rain therefore the football field cannot be wet (How about a sprinkler system?)
Affirming the consequent:
The field is wet therefore it must have rained.
(Sprinklers may have been on)

6. Contrapositive
The only logical equivalent to A=> B is the contrapositive statement ~B => ~A.
EX1: If it rains then the field will be wet.
(Contrapositive) The field is dry therefore it did not rain.
EX2: If cigarettes are addictive then past consumption influences present consumption.
(Contrapositive) If past consumption does not influence present consumption then cigarettes are not addictive.