What would lead an economist to conclude that Theory A is superior to Theory B?
A) Theory A predicts real-world events better than does Theory B.
B) The assumptions underlying Theory A are more realistic than are the assumptions underlying Theory B.
C) Theory A explains how people think, whereas Theory B only explains what they do.
D) Theory A is based on the assumption that an individual typically cannot determine what is in his or her own best interest, whereas Theory B assumes that each person knows what is in his or her own best interest and acts accordingly.
Answer: A
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An economist estimates the value of a nature preserve by calculating the price premium people pay for houses located adjacent to the preserve. This is an example of what type of economic valuation?
a. Hedonic pricing b. Production function valuation c. Contingent valuation d. Travel cost method e. Engineering cost valuation
A countervailing duty is a tariff that is levied to counteract
A) the dumping of goods in the domestic market by foreign firms. B) a sudden surge of imports which hurt a domestic industry. C) subsidies given to foreign firms by their own governments. D) the tariff on domestic goods that are enacted by foreign governments. E) low prices for imported goods that are made in countries with low wages.