Economic Engineering

question 15

Multiple Choice

Economic engineering:

• A) focuses exclusively on social factors that affect incentives.
• B) is the process of designing markets and coordinating mechanisms to achieve a specific goal.
• C) simulates virtual economies on the computer and lets coordination mechanisms emerge.
• D) is a scientific approach to economics in contrast to the heuristic supply/demand model.

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Definitions:

Complementary Goods

Products or services that are typically used together, where the increase in consumption of one leads to an increase in consumption of the other.

Good X

A term used to denote a specific product or commodity in economic models.

Substitute Goods

Products or services that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.

Demand

Demand refers to the quantity of a product or service that consumers are willing and able to purchase at various prices during a given period.