Evaluating Economic Methodologies
Two economists are studying the ride-sharing market in a major city. Economist A focuses on modeling supply and demand for rides, treating the existing city regulations, driver classification laws, and platform fee structures as fixed parameters. Economist B, however, begins their research by investigating why these specific regulations and classifications were established, what the costs of enforcing them are, and how alternative legal frameworks might affect the organization of the market. Which economist's approach better reflects an inquiry into the fundamental principles that determine an economy's institutional structure? Justify your answer.
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CORE Econ
Economics
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.10 Market successes and failures: The societal effects of private decisions - The Economy 2.0 Microeconomics @ CORE Econ
Evaluation in Bloom's Taxonomy
Cognitive Psychology
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Related
Which of the following questions most accurately reflects the core of Ronald Coase's investigation into the foundational institutional structure of an economy?
Evaluating Assumptions in Economic Modeling
Analyzing Economic Organization
Evaluating Economic Methodologies
Ronald Coase's investigation into the economy's institutional structure concluded that economists should treat the existing legal and organizational frameworks as fixed parameters in their models, rather than as variables to be explained.
An economist is studying the ride-sharing industry. Instead of only building a model to predict prices based on the existing app-based platform structure, they first investigate questions like: 'Why did this industry organize around large platforms instead of individual drivers contracting directly with passengers?' and 'What legal and technological factors made this organizational form possible and efficient?'. This investigative starting point is fundamentally different from an approach that takes the industry's current structure as a given. What does this economist's initial line of questioning primarily focus on?
An economist influenced by the idea of investigating the foundational institutional structure of an economy would ask certain types of questions when observing economic phenomena. Match each economic phenomenon below with the foundational question that reflects this investigative approach.
Formulating a Foundational Economic Inquiry
Power Dynamics in the Hiring Process
An economist is studying the prevalence of large, publicly-traded corporations in the modern economy. Which of the following research questions best exemplifies an investigation into the economy's foundational institutional structure, rather than an analysis of behavior within the existing structure?