chapter 2 economic methods and economic questions Flashcards
what is the mean of a game where one of two possible outcomes 20% of the time with a value of 5 and the possible outcome has a value of 10
9
economic models are:
simplifications of reality that focus on key relationships and ignore less relevant details
reverse causality is most indicated when:
wealthy people are shown to be more healthy
hypotheses are:
predictions generated by a model
once an economic mode, is formula from data with a sufficient correlation:
the model now can be used to suggest causation
a variable mag be an inflation factor:
that might not change with another variable
a variable that moves in the same direction, then later moves in the opposite direction of another variable. these variables:
have no correlation
correlations means:
a mutual relationship between two variables
when scientists use historical data to test a theory and subjects have been assigned to control and treatment groups using a random process that is not controlled, by the person conducting the experiment, is called ________
a natural experiment
when the price of walmart stock moved higher at the same time the price of xyz stock moves lower, the two stock prices are said to:
be negatively correlated
cigarette lighters are correlated with house fires, therefore:
correlations does not imply causation. a third factor must be involved
an experiment is
a controlled method of investigation of cause and effect
which is the best of example of causation
a company gives special training to its employees. productivity later increases
predictions generated by a model that are often tested with specific measurements or observations are known as:
hypotheses
natural experiment
uses historical data to test a theory using a random process not controlled by an individual
