An Economist Builds a Model by Beginning with Certain Self-Evident

question 4

Multiple Choice

An economist builds a model by beginning with certain self-evident principles and then derives the implications of that model. What approach is this economist taking?

• A) Inductive
• B) Deductive
• C) Apophatic
• D) Experimental

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Definitions:

Marginal Opportunity Cost

The cost of forgoing the next best alternative when choosing between two options.

Production Possibilities Schedule

A table that shows the different combinations of various goods that a country can produce with given resources and technology.

Steel

An alloy of iron and carbon, and sometimes other elements, widely used in construction and manufacturing due to its high tensile strength and durability.

Rationality

The quality of being based on or in accordance with reason or logic, often involving the making of decisions using cost-benefit analysis.