Exam 21: Thinking Like a Modern Economist

Say that Janie is exhibiting the endowment effect as she makes a decision. She is:

What are the three most common structures that economic models have?

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:

The smaller the coefficient of determination, the better the chance of every point being on the "best fit" line.

How do the traditional building blocks differ from the behavioral building blocks? What similarities do they have? What are the advantages and disadvantages of each set of building blocks?

If you are carrying out purposeful behavior, you are:

What does your author mean when he says that there is a tradeoff between simplicity and completeness?

The statistical analysis of economic data is referred to as:

Heuristic models are:

When it is impossible to carry out a controlled experiment, economists often turn to a:

How does the empirical testing of formal models "reverse" the process of heuristic empirical modeling?

What is the endowment effect? How do behavioral economists explain the existence of this phenomenon?

Models that that require knowledge of the relevant history to reach a conclusion are referred to as:

Behavioral economists want to:

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

What are the limits of heuristic models?

Do economic models lead directly to theorems or to precepts? Why or why not?

Traditional economic models highlight social dimensions of economic problems.

What is a natural experiment? Why do economists rely on natural experiments?

How do traditional and behavioral economists differ in their opinions about whether households are saving enough?