The Acceptance of a Theory as a Basis for Research

question 70

Multiple Choice

The acceptance of a theory as a basis for research depends primarily on its

• A) parsimonious explanation of observed facts.
• B) usefulness in leading to confirmable hypotheses.
• C) consistency with previously established knowledge.
• D) ability to point up new areas of investigation.

---

Definitions:

Income Effect

How an adjustment in income levels for individuals or the economy affects the demand for goods or services.

Engel Curve

A graphic representation showing how a consumer's demand for a good varies with income, keeping other factors constant.

Strictly Convex Preferences

Preferences where consumers always prefer mixtures of goods to extremes, demonstrating a consistent desire for variety.

Demand Curve

A graphical representation in economics that shows the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at varying price levels.