Explaining Model Discrepancies in Work-Leisure Trends
An economic historian compares two countries, A and B, which had identical growth in average wages from 1970 to 2020. A simple economic model, which assumes individuals only choose between more income and more free time, predicts that working hours should have fallen in both countries. The data shows the prediction was accurate for Country A, but in Country B, working hours remained high. Identify one plausible cultural factor and one plausible political factor that are ignored by the model but could explain why Country B's outcome was different. Briefly justify how each factor would lead to higher working hours.
0
1
Tags
Science
Economy
CORE Econ
Social Science
Empirical Science
Economics
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.3 Doing the best you can: Scarcity, wellbeing, and working hours - The Economy 2.0 Microeconomics @ CORE Econ
Analysis in Bloom's Taxonomy
Cognitive Psychology
Psychology
Related
An economist uses a simple model that only considers how wage changes affect an individual's choice between consumption and free time. The model predicts that as a country's average wage rises, its citizens will work fewer hours. However, when comparing two countries with similar histories of strong wage growth, the economist finds that working hours decreased significantly in one country but remained high in the other. Which of the following best explains the model's failure to predict the outcome in both countries?
Analyzing Divergent Work-Leisure Outcomes
Evaluating a Simplified Economic Model
Critique of a Simplified Work-Leisure Model
A simple economic model, which assumes all factors other than individual preferences for consumption and free time are held constant, is sufficient for explaining why working hours have evolved differently in various countries over the past century.
An economist is using a simplified model to analyze work-leisure choices. The model assumes that only an individual's wage and their personal preference for goods versus free time affect their decision on how many hours to work. Match each real-world factor, which is excluded from this model, to the specific way it could limit the model's accuracy in explaining working hour trends.
Explaining Model Discrepancies in Work-Leisure Trends
Evaluating a Policy Recommendation Based on a Simplified Model
An economist creates a model to explain how individuals choose between working more to earn money for consumption and working less to have more free time. The model only includes two factors: the person's hourly wage and their personal preference for consumption versus free time. Based on this model, the economist argues that if a country's average wages rise, its citizens will universally choose to work fewer hours. Which statement provides the most significant critique of this argument's applicability to the real world?
Analyzing a Model's Predictive Failure
Critique of a Simplified Work-Leisure Model