Exam 21: Thinking Like a Modern Economist

A model that statistically discovers a pattern in the data is called a(n)________ model.

If an economist wanted to understand why people don't buy life insurance, he would want to use the deductive approach.

Being able to find stable patterns in data means that empirical models can be labeled as:

What two assumptions are traditional economists more likely to make compared to behavioral economists?

Relying on experiments and statistical analysis of real-world observations is the premise behind:

Suppose you were suspicious that shorter people lived longer lives,how would you go about testing this hypothesis? What kind of model would you need to use? How would you determine whether height was related to longevity? What are the potential shortcomings of your analysis?

Modern traditional economics relies on complex models that are easy to test in real life.

An economist observes that a pharmaceutical company is sponsoring a diabetes clinic and providing free medications. She concludes that the pharmaceutical company is concerned not only about profits but also about fair distribution of drugs to those who need them. This economist is most likely a(n):

The primary problem with heuristic models is that:

To decide what is meant by enlightened self-interest, behavioral economists will:

Behavioral economists believe in modifying the assumption that people are rational and follow their own self-interest.

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

Is following a rule-of-thumb rational? Can it ever be rational to be irrational?

If a teacher was curious to see if collaboration among students leads to higher grades, which of the following models would be the best to use?

What is the difference between the purposes of a scientific model and an engineering model?

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

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):