Question 1

Give four examples of complicated modern formal models that are usable due to advances in mathematics and computing,and give a brief description of each.

Accepted Answer

A path-dependent model is a model that h...

Question 2

What is a regression model? How do you interpret the worth of a regression model?

Accepted Answer

A regression model is a type of empirica...

Question 3

"The problem of getting people to buy car insurance is best solved by the market." This belief belongs to which type of economist?

Accepted Answer

A)  Behavioral
B)  Traditional
C)  Modern
D)  KeynesianE) A) and D)
F) C) and D)

Question 4

The supply and demand model is the workhorse of the principles of economics because it:

Accepted Answer

A)  is a useful model by which students can be introduced to economic reasoning.
B)  is a perfect model and can never be improved upon.
C)  does not have to have any empirical testing to back up the results of the model.
D)  follows directly from the inductive approach to economics.E) All of the above
F) None of the above

Question 5

What is the glue that holds modern economics together?

Accepted Answer

A)  The supply and demand model
B)  The economic decision rule
C)  Modeling
D)  The invisible hand theoremE) C) and D)
F) All of the above

Question 6

For me to stop getting speeding tickets for a year, I gave five friends devices that measure my driving speed. If I drove over the speed limit by more than 5 miles per hour, I would have to pay them each $1,000. This would be an example of:

Accepted Answer

A)  a deductive decision.
B)  opportunity costs.
C)  a precommitment strategy.
D)  sunk costs.E) B) and C)
F) A) and D)

Question 7

A ________ is a simplified representation of a problem that captures the essential issues.

Accepted Answer

A)  precept
B)  theorem
C)  hypothesis
D)  modelE) A) and D)
F) A) and C)

Question 8

What does your author mean when he says that the human mind is a fast pattern completer?

Accepted Answer

He is pointing out the psychological rea...

Question 9

An economist builds a model by beginning with certain self-evident principles and then derives the implications of that model. What approach is this economist taking?

Accepted Answer

A)  Inductive
B)  Deductive
C)  Apophatic
D)  ExperimentalE) A) and D)
F) A) and B)

Question 10

An economist observes that a monopolist does not take full advantage of its market power. She concludes that there must be some rational reason for this behavior that she has not yet discovered. This economist is most likely to be a(n) :

Accepted Answer

A)  traditional economist.
B)  behavioral economist.
C)  irrational economist.
D)  engineering economist.E) A) and D)
F) All of the above

Question 11

Behavioral economists attempt to take into account predictably irrational behavior.

Accepted Answer

A) True 
 B)False  True

Question 12

What distinguishes economists from other scientists?

Accepted Answer

A)  Economists see the world through a lens of incentives; other scientists focus on other aspects of the world.
B)  Economists use models; other scientists build scaled-down replicas of what they are studying.
C)  Economists use regression models; other scientists use only correlations among variables.
D)  Economists focus more on policy issues compared with other scientists.E) A) and B)
F) None of the above

Question 13

How do traditional and behavioral economists differ in their opinions about economic growth?

Accepted Answer

Traditional economists tend to favor eco...

Question 14

In behavioral economics people gravitate toward certain points. These points are called:

Accepted Answer

A)  path-dependent points.
B)  best fit points.
C)  anchor points.
D)  feedback points.E) C) and D)
F) A) and D) C

Question 15

After a hurricane, several gas stations decide to keep their gas prices at the prehurricane level. An economist who most likely believes that there has to be some rational reason for this behavior is more than likely a(n) :

Accepted Answer

A)  irrational economist.
B)  Keynesian economist.
C)  traditional economist.
D)  engineering economist.E) All of the above
F) A) and B)

Question 16

Are modern economists unified in their prescriptions for government policy? Do behavioral economists and traditional economists generally agree or disagree on government policy?

Accepted Answer

No.Given the broad range of building blo...

Question 17

What distinguishes a deductive approach from an inductive approach to modeling?

Accepted Answer

A)  An inductive approach begins by looking at the data, whereas a deductive approach develops the implications of a model first.
B)  Inductive modeling uses data, whereas deductive modeling does not.
C)  The deductive approach begins by looking at the data, whereas the inductive approach begins with the model.
D)  The inductive approach does not have conclusions for viable policies, whereas the deductive approach does.E) A) and B)
F) A) and C)

Question 18

Give an example of two different sets of assumptions that could underlie different economic models.

Accepted Answer

Student answers may vary,but the easiest...

Question 19

In your text,the author says,"Data,by themselves,have no meaning;they have to be interpreted and given meaning,and how one interprets the data depends on the model and the building blocks one has in one's mind." What does he mean by this? What does this say about the relationship between empirical and formal models?

Accepted Answer

The author was pointing out that empiric...

Question 20

Have all modern economists given up the use of the traditional building blocks? Why or why not?

Accepted Answer

No.Modern economists differ in their opinions about how far from the traditional building blocks economists should depart.Gary Becker is given as an example of a modern economist who favors sticking closely to the traditional building blocks.The two most important reasons that many economists may still favor the use of the traditional building blocks are because they believe that these building blocks closely embody the realities of human economic behavior or because they believe that these building blocks allow for simpler,more useful models.

Exam 21: Thinking Like a Modern Economist

Give four examples of complicated modern formal models that are usable due to advances in mathematics and computing,and give a brief description of each.

Correct Answer
verified
A path-dependent model is a model that h...
View Answer

What is a regression model? How do you interpret the worth of a regression model?

Correct Answer
verified
A regression model is a type of empirica...
View Answer

"The problem of getting people to buy car insurance is best solved by the market." This belief belongs to which type of economist?

Correct Answer
verified

The supply and demand model is the workhorse of the principles of economics because it:

Correct Answer
verified

What is the glue that holds modern economics together?

Correct Answer
verified

For me to stop getting speeding tickets for a year, I gave five friends devices that measure my driving speed. If I drove over the speed limit by more than 5 miles per hour, I would have to pay them each $1,000. This would be an example of:

Correct Answer
verified

A ________ is a simplified representation of a problem that captures the essential issues.

Correct Answer
verified

What does your author mean when he says that the human mind is a fast pattern completer?

Correct Answer
verified
He is pointing out the psychological rea...
View Answer

An economist builds a model by beginning with certain self-evident principles and then derives the implications of that model. What approach is this economist taking?

Correct Answer
verified

An economist observes that a monopolist does not take full advantage of its market power. She concludes that there must be some rational reason for this behavior that she has not yet discovered. This economist is most likely to be a(n) :

Correct Answer
verified

Behavioral economists attempt to take into account predictably irrational behavior.

Correct Answer
verified
True

What distinguishes economists from other scientists?

Correct Answer
verified

How do traditional and behavioral economists differ in their opinions about economic growth?

Correct Answer
verified
Traditional economists tend to favor eco...
View Answer

In behavioral economics people gravitate toward certain points. These points are called:

Correct Answer
verified
C

After a hurricane, several gas stations decide to keep their gas prices at the prehurricane level. An economist who most likely believes that there has to be some rational reason for this behavior is more than likely a(n) :

Correct Answer
verified

Are modern economists unified in their prescriptions for government policy? Do behavioral economists and traditional economists generally agree or disagree on government policy?

Correct Answer
verified
No.Given the broad range of building blo...
View Answer

What distinguishes a deductive approach from an inductive approach to modeling?

Correct Answer
verified

Give an example of two different sets of assumptions that could underlie different economic models.

Correct Answer
verified
Student answers may vary,but the easiest...
View Answer

Correct Answer
verified
The author was pointing out that empiric...
View Answer

Have all modern economists given up the use of the traditional building blocks? Why or why not?

Exam 21: Thinking Like a Modern Economist

Give four examples of complicated modern formal models that are usable due to advances in mathematics and computing,and give a brief description of each.

Correct AnswerverifiedA path-dependent model is a model that h...View AnswerShow Answer

What is a regression model? How do you interpret the worth of a regression model?

Correct AnswerverifiedA regression model is a type of empirica...View AnswerShow Answer

"The problem of getting people to buy car insurance is best solved by the market." This belief belongs to which type of economist?

Correct AnswerverifiedShow Answer

The supply and demand model is the workhorse of the principles of economics because it:

Correct AnswerverifiedShow Answer

What is the glue that holds modern economics together?

Correct AnswerverifiedShow Answer

For me to stop getting speeding tickets for a year, I gave five friends devices that measure my driving speed. If I drove over the speed limit by more than 5 miles per hour, I would have to pay them each $1,000. This would be an example of:

Correct AnswerverifiedShow Answer

A ________ is a simplified representation of a problem that captures the essential issues.

Correct AnswerverifiedShow Answer

What does your author mean when he says that the human mind is a fast pattern completer?

Correct AnswerverifiedHe is pointing out the psychological rea...View AnswerShow Answer

An economist builds a model by beginning with certain self-evident principles and then derives the implications of that model. What approach is this economist taking?

Correct AnswerverifiedShow Answer

An economist observes that a monopolist does not take full advantage of its market power. She concludes that there must be some rational reason for this behavior that she has not yet discovered. This economist is most likely to be a(n) :

Correct AnswerverifiedShow Answer

Behavioral economists attempt to take into account predictably irrational behavior.

Correct AnswerverifiedTrue

What distinguishes economists from other scientists?

Correct AnswerverifiedShow Answer

How do traditional and behavioral economists differ in their opinions about economic growth?

Correct AnswerverifiedTraditional economists tend to favor eco...View AnswerShow Answer

In behavioral economics people gravitate toward certain points. These points are called:

Correct AnswerverifiedC

After a hurricane, several gas stations decide to keep their gas prices at the prehurricane level. An economist who most likely believes that there has to be some rational reason for this behavior is more than likely a(n) :

Correct AnswerverifiedShow Answer

Are modern economists unified in their prescriptions for government policy? Do behavioral economists and traditional economists generally agree or disagree on government policy?

Correct AnswerverifiedNo.Given the broad range of building blo...View AnswerShow Answer

What distinguishes a deductive approach from an inductive approach to modeling?

Correct AnswerverifiedShow Answer

Give an example of two different sets of assumptions that could underlie different economic models.

Correct AnswerverifiedStudent answers may vary,but the easiest...View AnswerShow Answer

Correct AnswerverifiedThe author was pointing out that empiric...View AnswerShow Answer

Have all modern economists given up the use of the traditional building blocks? Why or why not?

Correct Answer
verified
A path-dependent model is a model that h...
View Answer

Correct Answer
verified
A regression model is a type of empirica...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
He is pointing out the psychological rea...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified
Traditional economists tend to favor eco...
View Answer

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified
No.Given the broad range of building blo...
View Answer

Correct Answer
verified

Correct Answer
verified
Student answers may vary,but the easiest...
View Answer

Correct Answer
verified
The author was pointing out that empiric...
View Answer