Experiments in Natural Settings Are Likely to Differ from Laboratory

question 38

Essay

Experiments in natural settings are likely to differ from laboratory experiments on four critical dimensions: goals,control,external validity,and consequences.Briefly describe the nature of the difference for each of these four dimensions.

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Definitions:

Consumed

The act of using up a good or service, thus removing it from the market and contributing to economic activity.

Marginal Utility

The variation in pleasure or usefulness a consumer feels from using one more unit of a product or service.

Diminishing Marginal Utility

The principle that as a consumer consumes more of a good or service, the additional satisfaction gained from consuming an additional unit decreases.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, opposite to what is observed with normal goods.