Which of the following is most likely to produce scientific evidence about a theory ?
Correct answer: B. An economist permanently employed at a leading university analyzing the impact of bank regulations on lending to small businesses
- A. A lawyer employed by Renault addressing the impact of air bags on passenger safety.
- B. An economist permanently employed at a leading university analyzing the impact of bank regulations on lending to small businesses
- C. An economist employed by the Trades union congress doing research on the impact of trade policy on workers' wages
- D. A radio talk show host collecting data from listeners on how capital markets respond to taxation
Explanation
A university economist is most likely to conduct independent research using systematic data and testable methods. Researchers employed directly by an interested organization may face conflicts of interest, while listener responses are usually unrepresentative.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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