Question 1

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

Question 2

Behavioral economists attempt to take into account predictably irrational behavior.

Accepted Answer

A) True 
 B)False  True

Question 3

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.

Question 4

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. 
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.

Question 5

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) Experimental 
A) Inductive 
B) Deductive 
C) Apophatic 
D) Experimental

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

Question 7

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. 
A) irrational economist. 
B) Keynesian economist. 
C) traditional economist. 
D) engineering economist.

Question 8

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 9

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 theorem 
A) The supply and demand model 
B) The economic decision rule 
C) Modeling 
D) The invisible hand theorem

Question 10

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 11

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 12

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 13

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 14

"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) Keynesian 
A) Behavioral 
B) Traditional 
C) Modern 
D) Keynesian

Question 15

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. 
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.

Question 16

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. 
A) traditional economist. 
B) behavioral economist. 
C) irrational economist. 
D) engineering economist.

Question 17

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 18

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. 
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.

Question 19

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

Accepted Answer

A) precept 
B) theorem 
C) hypothesis 
D) model 
A) precept 
B) theorem 
C) hypothesis 
D) model

Question 20

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

Accepted Answer

Traditional economists tend to favor eco

Exam 21: Thinking Like a Modern Economist

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

Behavioral economists attempt to take into account predictably irrational behavior.

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

What distinguishes economists from other scientists?

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?

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:

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):

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

What is the glue that holds modern economics together?

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

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

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

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

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

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):

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.

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

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

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

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

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