Two Economists Are Arguing About How to Approach a Problem

question 35

Multiple Choice

Two economists are arguing about how to approach a problem. The first economist says, "Look, I can see in the data that consumption rises when income rises. We need to build a model with an equation that relates the two." The second economist responds, "I can see that is the case, but we have to understand why that is true before we build any equations, and then we will see what the model says about the relationship between the two." What kind of economist is the second one likely to be?

• A) A traditional economist
• B) A behavioral economist
• C) An irrational economist
• D) An engineering economist

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Definitions:

Environmental Management Accounting

An accounting method that tracks both financial and environmental performance of a business.

Financial

Relating to money or how money is managed.

Social

Relating to society or its organization, including interactions and relationships within.

United States Environment Protection Authority

A federal agency tasked with protecting human health and the environment by creating and enforcing regulations based on laws passed by Congress.