Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Chapter 2, Problem 5P
To determine
Direction and reasoning of causality in the following cases:
(a) If the number of police force rises with a simultaneous decline in the crime rates and if higher crime rates lead to a higher number of the police force.
(b) If a nation who wants to win a Nobel prize could eat more chocolate when there is a strong positive correlation between Nobel prize-winning and chocolate consumption.
(c) When the muscles mass and strength between the elders who live independently are lower than the elderly athletes who exercise regularly and live a healthier life.
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The Big Ideas: End of Chapter Problem
As Nobel prize winner and New York Times columnist Paul Krugman has noted, the field of economics is a lot like the field
of medicine: They are fields where knowledge is limited, and where many cures are quite painful, but where regular people
care deeply about the issues. What are some other ways that economics and medicine are alike?
Alike
It is difficult to run randomized experiments.
Charlatans offer useless or damaging remedies for problems.
There is lots more to learn.
Professionals are well-respected.
Answer Bank
Not alike
Person-on-the-street is over-confident about personal knowledge.
Practitioners must be licensed.
35. A researcher observes that, on average, the number of divorces in cities with major league
baseball teams is larger than in cities without major league baseball teams. The most plausible
explanation for this observed association is
a) the presence of a major league baseball team causes the number of divorces to rise (perhaps
husbands are spending too much time at the park).
b) the high number of divorces is responsible for the presence of a major league baseball team (ore
single men means potentially more fans at the ballpark, making it attractive for an owner to relocate
to such cities).
c) the association is due to common response (major league teams tend to be in large cities with
more people hence a greater number of divorces).
d) the observed association is purely coincidental. It is implausible to believe the observed
association could be anything other than accidental.
Economists in Champaign have been studying the local market for pizza. The market is described in
the graph:
Market for Pizza
10.3
10
9.
8
7
6.1
6
5.7
5
4.65
4.1
3.1
2.8
2.8
2.4
2.1
(2.1]
2
500 518
464 479
Quantity
401
430
545
577
Some research by the local university shows that eating pizza improves health in several ways. The
local government decides to subsidize pizza consumption by paying $1.6 of every pizza
sold(essentially a negative tax of $1.6). How much will the government spend with the subsidy?
Price
Chapter 2 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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