Exam 21: Thinking Like a Modern Economist

When Williams-Sonoma introduced its first bread baker at $200, sales were low. But when it decided to offer a fancier $300 version, sales of the $200 bread baker rose tremendously. An economist concluded that consumers needed another bread baker for comparison to decide whether the $200 bread baker was a deal. This economist is likely to be a(n):

Warren Buffett feared gaining weight. To keep himself from eating too much, he gave unsigned checks for $10,000 to his children, promising to sign them if he exceeded his desired weight by a certain date. This is an example of:

If you are carrying out purposeful behavior, you are:

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?

Behavioral economists attempt to take into account predictably irrational behavior.

Which of the following would not be part of the empirical approach when studying such questions as "Has abortion led to a decrease in the crime rate?"

Heuristic models are:

Economists who use supply/demand models:

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

An economist who is most likely to believe that people will never find $200 lying on the street is referred to as:

An economist observes that a monopolist does not take full advantage of its market power. She concludes that the firm may not do so because it might not be fair. This economist is most likely to be a(n):

Until the 1940s economics tended to focus on deductive reasoning. This can be attributed to the:

Traditional economists prefer simpler models because they give clear-cut results that can better highlight certain important insights.

What distinguishes economists from other scientists?

The statistical analysis of economic data is referred to as:

A behavioral economist:

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):

Suppose people believe that prices will continue to fall in the future, and so they put off buying things now. As a result, prices fall. In economics we refer to this as a(n):

All economists believe that:

Which of the following views most likely would belong to a behavioral economist?