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Microeconomics Study Set 30

Business

Quiz 21 :

Thinking Like a Modern Economist

Quiz 21 :

Thinking Like a Modern Economist

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The assumptions that form the basis of any economic model are referred to as:
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Multiple Choice
Answer:

Answer:

C

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The more complex a model is, the easier it is to arrive at a conclusion.
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True False
Answer:

Answer:

False

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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?
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Multiple Choice
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Answer:

B

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Science is justified through heuristic models.
True False
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Assuming that people follow enlightened self-interest allows behavioral economists to create a single clear-cut model that can be applied across many different contexts.
True False
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What distinguishes scientific from engineering models?
Multiple Choice
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A ________ is a simplified representation of a problem that captures the essential issues.
Multiple Choice
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Which type of economists rely on the widest array of models?
Multiple Choice
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The smaller the coefficient of determination, the better the chance of every point being on the "best fit" line.
True False
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Behavioral economists attempt to take into account predictably irrational behavior.
True False
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Behavioral economists believe in modifying the assumption that people are rational and follow their own self-interest.
True False
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What is the glue that holds modern economics together?
Multiple Choice
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What distinguishes economists from other scientists?
Multiple Choice
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The endowment effect is used to describe the mistake a consumer makes when he or she accounts for the monetary costs of his or her decisions but ignores the nonmonetary opportunity costs.
True False
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Traditional economists prefer simpler models because they give clear-cut results that can better highlight certain important insights.
True False
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If an economist wanted to understand why people don't buy life insurance, he would want to use the deductive approach.
True False
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Traditional models see no role for the government in pushing individuals toward the preferred equilibrium.
True False
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What distinguishes a deductive approach from an inductive approach to modeling?
Multiple Choice
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Traditional economic models highlight social dimensions of economic problems.
True False
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Modern traditional economics relies on complex models that are easy to test in real life.
True False
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