Tools Used by Economists
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Questions and Answers

What is one of the tools that economists use to examine economic events and figure out how a given economic decision can affect the world?

  • Measuring waves in a wave tank
  • The law of unintended consequences
  • The scientific method (correct)
  • Observing bacteria under a microscope

What is the first step in the scientific method?

  • Developing a hypothesis
  • Conducting studies to collect information
  • Posing a question (correct)
  • Analyzing the information

What is one of the most effective tools that economists use according to the passage?

  • Graphs (correct)
  • Growing bean plants
  • Collecting data on bacteria
  • Measuring waves in a wave tank

Which tool involves posing a question, researching, developing a hypothesis, conducting studies, analyzing information, and evaluating the hypothesis?

<p>The scientific method (A)</p> Signup and view all the answers

What do economists need to examine economic events, simplify them, and figure out how a given economic decision can affect the world?

<p>A set of tools (C)</p> Signup and view all the answers

What gives vital insights into the physical world and its processes, similar to what economists do with economic events?

<p>Laboratory experiments (C)</p> Signup and view all the answers

Why do economists use graphs?

<p>To simplify the complex, three-dimensional world (A)</p> Signup and view all the answers

What is a variable, as mentioned in the text?

<p>A quantity that can vary or change (D)</p> Signup and view all the answers

What is an economic model?

<p>A simplified representation of reality (A)</p> Signup and view all the answers

What is the rational-behavior model also known as?

<p>The homo economicus model (B)</p> Signup and view all the answers

What do economists analyze when people interact with different speed limits?

<p>How increases in speed affect transportation costs (A)</p> Signup and view all the answers

Why do economists use natural experiments?

<p>To acquire existing and historical data (C)</p> Signup and view all the answers

According to the rational-behavior model, how do humans make decisions?

<p>Based on their self-interest (D)</p> Signup and view all the answers

What is the significance of the 'invisible hand' in Adam Smith's description of the free market?

<p>It promotes self-interested market activity that benefits society (A)</p> Signup and view all the answers

What does the term 'ceteris paribus' mean in the context of economic modeling?

<p>Other relevant factors remaining unchanged (B)</p> Signup and view all the answers

What is the primary purpose of economic models according to the text?

<p>To explain and predict how the economy operates (B)</p> Signup and view all the answers

According to the text, why do economists use the rational-behavior model?

<p>To predict and explain human behavior (B)</p> Signup and view all the answers

What is the rational-behavior model primarily focused on?

<p>Understanding how people generally react to incentives (A)</p> Signup and view all the answers

In economic modeling, what does 'ceteris paribus' allow economists to do?

<p>Focus on understanding one aspect while keeping other aspects the same (C)</p> Signup and view all the answers

'Other things being equal' or 'other relevant factors remaining unchanged' refers to which concept in economic modeling?

<p>'Ceteris paribus' (D)</p> Signup and view all the answers

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