The main tools of the Austrian School are represented by methodological individualism and apriorism. Methodological individualism is a systematic approach that focuses on the individual as the fundamental unit of study in economics and how individual goals and actions transcend the personal sphere and influence society. It differs from collectivism, which focuses on the collective as the primary subject of study, relegating the individual to a mere part of the whole. Methodological individualism does not deny the aggregate impact of groups on individuals, but argues that social groups, or the collective, are ultimately composed of individuals with their own goals and objectives, whose convergence fosters the formation of such groups. In other words, collective groups are ultimately several acting individuals.

Apriorism holds that the most basic human knowledge is innate, based on certain logical structures embedded in the mind that enable valid reasoning without the need for empirical data. Thus, this knowledge is valid and certain in all contexts. A prominent example relevant here is that of human action, which cannot be denied without human action, and other consequent economic laws.

In contrast to apriorism, empiricism is employed by the mainstream through the scientific method. Empiricism is characterized by using hypotheses and testing to generate new knowledge derived from sensory information.