Explain how an economist is like an engineer. Give an example.
What will be an ideal response?
Should show a thorough understanding of basic role of an economist. Like an engineer, economists try to figure out how things work and then describe what would happen if you changed something. For example, an economist might do a study that compares the buying habits of consumers in urban and rural areas. The study shows that urban and rural consumers have different favorite brands of coffee. Then the economist would ask: “If price of the favorite coffee in rural areas increased significantly, how would rural consumers respond?” The economist hypothesizes that in such a situation, most rural consumers would switch to the favorite urban coffee, instead of switching to another beverage, such as tea.
You might also like to view...
Which of the following will happen if a firm in a duopoly with homogeneous products increases its price above its marginal cost once a Nash equilibrium is reached?
A) The firm will earn huge economic profits. B) The firm will gain market share. C) The firm will lose all its customers to its rival. D) The firm will continue to earn zero economic profits.
In the above figure, a negative relationship between price and quantity is shown in
A) Figure A. B) Figure B. C) both Figure A and Figure B. D) neither Figure A nor Figure B.
"Exotic" mortgages became popular in part because home prices were expected to
A. rise quickly. B. become increasingly unpredictable. C. fall precipitously. D. remain virtually constant.
Which of the following changes would not be considered a likely source of changes in Real GDP according to real business cycle theory?
A) a natural disaster B) a technological change C) a change in the price of an important input D) a change in the money supply E) none of the above