This chapter discussed natural and randomized experiments. How does a natural experiment differ from a randomized one? Which one is likely to yield more accurate results?
What will be an ideal response?
A natural experiment is an empirical study in which some process – out of the control of the experimenter – has assigned subjects to control and test groups in a random or nearly random way. The process of randomization involves the assignment of subjects by chance, rather than by choice, to a test group or control group. The test group and the control group are treated identically, except along a single dimension that is intentionally varied across the two groups. The impact of this variation is the focus of the experiment. Both types of experiments can yield accurate results. Natural experiments are likely to be used when there are budget or time constraints to conducting a randomized experiment.
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Developing countries must confront industrial countries' trade restrictions, such as tariffs and quotas
a. True b. False
If the price elasticity of supply is 1.2, and price increased by 5%, quantity supplied would
a. increase by 4.2%. b. increase by 6%. c. decrease by 4.2%. d. decrease by 6%.
A social welfare function
A. is a function made by the Department of Welfare. B. is a function that shows that the utilities of society are incorporated into society's well-being. C. can never be derived numerically. D. all of these answer options are correct.
If the price of good X is $10 and the price of good Y is $5, how much of good X will the consumer purchase if her income is $15?
A. 3 B. 0 C. 2 D. Cannot tell based on the above information.