To test the theory that if the price of pens rises, then pen purchases fall, an economist would
A) analyze data on the price of pens and the price of pencils without holding other factors constant.
B) investigate whether people purchase more pens when their income rises.
C) analyze data on pen purchases linked to the price of pens, holding other factors constant.
D) ask his or her friends if they would buy fewer pens when the price rises.

Question

Quizplus · Accepted Answer

To test the theory that the price of pens and pen purchases have an inverse relationship, the economist needs to hold other factors constant and analyze data on pen purchases linked to the price of pens. This can be done through statistical analysis or experiments where the price of pens is manipulated while controlling for other variables. Option A does not hold other factors constant, option B is investigating a different relationship, and option D is not a reliable or scientific method of testing economic theories.

To Test the Theory That If the Price of Pens