Explain the significance of judging theories based on prediction rather than the way its sounds.
Explanation of Solution
Predictions are a stepping stone of believing or not believing a theory because sometimes people want to believe some theories over others, as the theory seems to confirm what people already believe. In real life, before 1960s, people had no idea about wireless mobile phones until its invention. Therefore, people believed that the landline mobile phones is the final invention. However, a scientist predicts with the evidence of technological changes that people will use wireless mobile phones in the future. Since people accept theory because the evidence of the prediction seems to confirm the beliefs of the individuals. Therefore, prediction has more importance than a theory sounds good to people.
Want to see more full solutions like this?
Chapter 20 Solutions
Mindtap Economics, 1 Term (6 Months) Printed Access Card For Arnold's Macroeconomics, 13th
- The methodology of ________ economics says that models should be based on predictions and not assumptions.arrow_forwardWrite a short essay explaining the modelling strategies of neoclassical economics.arrow_forwardIn what way is neoclassical economics different from old and new institutional economics? Which school of thought is founded on principles that are closer to reality?arrow_forward
- Explain the phrase "concepts are the building blocks of theory" in more detail.arrow_forwardEconomic behavior is more complex than assumed by conventional economic theory. Political economy explains the functioning of government. Behavioral economics ties psychology into human behavior. Economists assume that individuals make rational decisions. However real people are more complex. Based on what you have learned in your assigned reading, answer the following questions in your initial post: What are the human behaviors economists should observe when creating economic models? Example: people tend to find solutions that are good enough, but not the best solutions. In your responses, comment on at least two of your peers' posts and share example of how non-rational human behavior can change an economic outcome.arrow_forwardEconomics came from the Greek word Oikos which means scarcity. Select one: True Falsearrow_forward
- It is often said that a good theory is one that can be refuted by an empirical, dataoriented study. Explain why a theory that cannot be evaluated empirically is not a good theoryarrow_forwardEconomics Outline six steps involved in formulating an econometric model.arrow_forwardIf economics is a positive science, why do economists always disagree?arrow_forward
- Suppose you and your friend go out for dinner. Your friend orders a cheeseburger and fries. When your food first arrives, you ask your friend if you can have one of his fries. He looks at you like you are crazy and says, "No!" Then a few minutes later, after you both have started eating, you ask again, and your friend reluctantly says, "Sure. Go ahead." An economist's explanation for your friend's change of heart is most likely to be that: Your friend's total utility declines as he eats more fries, so he's more likely to share with you after he's eaten a few. Your friend's marginal utility from eating additional fries declines as he eats more of them, so he's more likely to share with you after he's eaten a few. Your friend's total utility increases as he eats more fries, so he's more likely to share with you after he's eaten a few. Your friend's marginal utility from eating additional fries increases as he eats more of them, so he's more likely to share with you…arrow_forwardRichard Thaler gives three criticisms of the homo economicus model. The first of these is “SIFs.”, but what are the other two?arrow_forwardDifferentiate economics as a social science and applied science?arrow_forward
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning