Lecture 1

Question 1

What was the marriage partner experiment by K. May about?

Answer 1

To see if individual preferences were consistent

Question 2

How many students acted irrationally in the marriage partner experiment?

Answer 2

17 out of 62 acted irrationally by choosing (1,2,2)

Question 3

What are 2 essential assumptions in standard economic models?

Answer 3

1. Individuals are rational
2. Individuals are self-interested

Question 4

What was the live green policy about?

Answer 4

Customers would either be given 5 cents for using a reusable bag or be charged 5 cents for each disposable bag used

Question 5

What did Homonoff find from the Live Green Policy?

Answer 5

1. Tax decreases fraction of customers using disposable bags by a substantial amount.
2. 5 cent reward generated no effect on behaviour

Question 6

What do empirical economists do in their research?

Answer 6

They argue a causal effect of variable A (independent) on B (dependent)

Question 7

What type of data is used to draw causal conclusions?

Answer 7

Experimental data

Question 8

What are the conditions for data to be considered experimental data

Answer 8

1. Experimenter directly controls the assignment of variable A
2. Assignment is done through a chance mechanism

Question 9

What are the 2 types of experimental data?

Answer 9

1. Laboratory experiment
2. Field experiment