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Updated on: 30 Aug 2019, 04:34
Originally posted by AtlanticGMAT on 29 Apr 2013, 08:02.
Last edited by Sajjad1994 on 30 Aug 2019, 04:34, edited 1 time in total.
Last edited by Sajjad1994 on 30 Aug 2019, 04:34, edited 1 time in total.
Updated - Complete topic (344).
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Hi All,
Thank you everyone for working on the first challenge. I'm glad that there was participation and I hope that everyone who did the challenge found it useful. Practice makes perfect so here is the 2nd challenge. For those of you who haven't done the first challenge or would like some background information please visit the first post:
https://gmatclub.com/forum/the-economist-reading-comprehension-challenge-151479.html
Go ahead and post your questions and I will try to get back ASAP. Let's try to keep things as on topic as possible (only relating to this passage) so that this can stay organized and easy for every one to use and learn from:).
Happy Studies,
HG.
According to the passage it could be reasonably inferred that some economists:
A. believe that a majority of people behave in ways that can be predicted by standard models
B. believe that some exceptions to the standard models of economics can be explained by theories developed in fields outside of economics
C. use only real people as the basis for their economic models
D. incorrectly apply the standard economic models to predict the behavior of real people
E. would benefit by drawing information from various competing fields of economics
According the passage, which of following is an example of the endowment effect?
A. Buying a new car for more money than you had expected to spend because you felt emotionally attached to the brand name.
B. Cancelling a vacation which has been planned for six months so that you can avoid missing a potentially lucrative business deal.
C. Selling an old coffee mug that you no longer use for more than the market value only because you consider it yours.
D. Putting a high value on your parents furniture because you associate it with childhood memories.
E. Placing a lower value on a baseball card that you plan to buy because you already own a card of comparable value.
Which of the following best expresses the main idea of the passage?
A. To describe some flaws in traditional economic thinking and to recommend a course of action to improve economic models and the accuracy of their predictions.
B. To provide a history of a certain type of economics along with a prediction for its future.
C. To describe a flaw in standard economic theory and provide several examples of how the flaw manifests itself in practical applications.
D. To describe several ways in which economists can benefit from the decision making theories of other fields and provide experimental evidence of these benefits.
E. To propose an adjustment to standard economic theory incorporating new ideas from other scientific fields.
The author would most likely agree with which of the following statements?
A. Other sciences outside of economics have developed decision making models which incorporate altruism, kindness, and loss aversion that can accurately predict human behavior.
B. Decision making models created by some biologists are superior to models created by economists who adhere to the standard economic models .
C. Some of the principles that are being incorporated into modern economics contradict the beliefs of some famous classic economists.
D. Self-interest should not be considered as a major contributor to rational decision making.
E. Traditional economics has not considered increased pleasure and reduced pain as two distinct sources of happiness.
Thank you everyone for working on the first challenge. I'm glad that there was participation and I hope that everyone who did the challenge found it useful. Practice makes perfect so here is the 2nd challenge. For those of you who haven't done the first challenge or would like some background information please visit the first post:
https://gmatclub.com/forum/the-economist-reading-comprehension-challenge-151479.html
Go ahead and post your questions and I will try to get back ASAP. Let's try to keep things as on topic as possible (only relating to this passage) so that this can stay organized and easy for every one to use and learn from:).
Happy Studies,
HG.
The Debt to Pleasure : https://www.economist.com/news/finance- ... mer-choice
In the experiment mentioned in the third paragraph it can be reasonably inferred that orthodox economics would have expected:
A. a pleasurable experience to create longer lasting and more vibrant memories
B. a more exaggerated response to painful experiences
C. the sequence of events to have less influence on the memory of the experience
D. most people to have preferred a longer but less painful procedure
E. most people to have preferred a shorter but more painful procedure
A. a pleasurable experience to create longer lasting and more vibrant memories
B. a more exaggerated response to painful experiences
C. the sequence of events to have less influence on the memory of the experience
D. most people to have preferred a longer but less painful procedure
E. most people to have preferred a shorter but more painful procedure
According to the passage it could be reasonably inferred that some economists:
A. believe that a majority of people behave in ways that can be predicted by standard models
B. believe that some exceptions to the standard models of economics can be explained by theories developed in fields outside of economics
C. use only real people as the basis for their economic models
D. incorrectly apply the standard economic models to predict the behavior of real people
E. would benefit by drawing information from various competing fields of economics
According the passage, which of following is an example of the endowment effect?
A. Buying a new car for more money than you had expected to spend because you felt emotionally attached to the brand name.
B. Cancelling a vacation which has been planned for six months so that you can avoid missing a potentially lucrative business deal.
C. Selling an old coffee mug that you no longer use for more than the market value only because you consider it yours.
D. Putting a high value on your parents furniture because you associate it with childhood memories.
E. Placing a lower value on a baseball card that you plan to buy because you already own a card of comparable value.
Which of the following best expresses the main idea of the passage?
A. To describe some flaws in traditional economic thinking and to recommend a course of action to improve economic models and the accuracy of their predictions.
B. To provide a history of a certain type of economics along with a prediction for its future.
C. To describe a flaw in standard economic theory and provide several examples of how the flaw manifests itself in practical applications.
D. To describe several ways in which economists can benefit from the decision making theories of other fields and provide experimental evidence of these benefits.
E. To propose an adjustment to standard economic theory incorporating new ideas from other scientific fields.
The author would most likely agree with which of the following statements?
A. Other sciences outside of economics have developed decision making models which incorporate altruism, kindness, and loss aversion that can accurately predict human behavior.
B. Decision making models created by some biologists are superior to models created by economists who adhere to the standard economic models .
C. Some of the principles that are being incorporated into modern economics contradict the beliefs of some famous classic economists.
D. Self-interest should not be considered as a major contributor to rational decision making.
E. Traditional economics has not considered increased pleasure and reduced pain as two distinct sources of happiness.
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09 May 2013, 22:42
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Hi,
Here is the explanation for question #2.
Happy Studies,
HG.
According to the passage it could be reasonably inferred that some economists:
A. believe that a majority of people behave in ways that can be predicted by standard models
It is tempting to choose this but this isn't stated anywhere in the passage. Just because some economists use the standard models does not mean that these economists believe that a majority of people behave in ways that can be predicted by standard models
B. believe that some exceptions to the standard models of economics can be explained by theories developed in fields outside of economics
The whole article supports this idea but especially paragraph 1 (He wants economists to accept that evidence from other disciplines does not just explain those bits of behaviour that do not fit the standard models.), paragraph 3, and paragraph 5.
C. use only real people as the basis for their economic models
this isn't stated in the passage
D. incorrectly apply the standard economic models to predict the behavior of real people
There is no discussion of how the standard economic models are applied
E. would benefit by drawing information from various competing fields of economics
The article talks about benefit from other scientific fields but not other fields of economics
Here is the explanation for question #2.
Happy Studies,
HG.
According to the passage it could be reasonably inferred that some economists:
A. believe that a majority of people behave in ways that can be predicted by standard models
It is tempting to choose this but this isn't stated anywhere in the passage. Just because some economists use the standard models does not mean that these economists believe that a majority of people behave in ways that can be predicted by standard models
B. believe that some exceptions to the standard models of economics can be explained by theories developed in fields outside of economics
The whole article supports this idea but especially paragraph 1 (He wants economists to accept that evidence from other disciplines does not just explain those bits of behaviour that do not fit the standard models.), paragraph 3, and paragraph 5.
C. use only real people as the basis for their economic models
this isn't stated in the passage
D. incorrectly apply the standard economic models to predict the behavior of real people
There is no discussion of how the standard economic models are applied
E. would benefit by drawing information from various competing fields of economics
The article talks about benefit from other scientific fields but not other fields of economics
19 Jun 2013, 06:15
Kudos
Bookmarks
Hi there,
I hope you are well. Here are the explanations for the last three.
Happy Studies,
HG.
3.
The endowment effect makes you give more value to things that you own. So we are looking for an example of the something that is owned that is being given more value than it should have.
According the passage, which of following is an example of the endowment effect?
A. Buying a new car for more money than you had expected to spend because you felt emotionally attached to the brand name.
Nothing is owned
B. Cancelling a vacation which has been planned for six months so that you can avoid missing a potentially lucrative business deal.
Nothing is owned
C. Selling an old coffee mug that you no longer use for more than the market value only because you consider it yours.
You own the mug and you assign it more value because you own it. Correct
D. Putting a high value on your parents furniture because you associate it with childhood memories.
You don't own the furniture
E. Placing a lower value on a baseball card that you plan to buy because you already own a card of comparable value.
This is not endowment effect. This is saying that you have a certain priced card and because of that you don't necessarily need another in that category therefore you are not willing to pay a lot for this other card of comparable value.
4.
Which of the following best expresses the main idea of the passage?
A. To describe some flaws in traditional economic thinking and to recommend a course of action to improve economic models and the accuracy of their predictions.
This has the right content and tone. The passage does describe flaws and then suggests incorporating other fields of study to improve the models. Correct
B. To provide a history of a certain type of economics along with a prediction for its future.
Overall it is not history.
C. To describe a flaw in standard economic theory and provide several examples of how the flaw manifests itself in practical applications.
This is missing the recommendation part.
D. To describe several ways in which economists can benefit from the decision making theories of other fields and provide experimental evidence of these benefits.
There was no experimental evidence of the benefits
E. To propose an adjustment to standard economic theory incorporating new ideas from other scientific fields.
This is close but the ideas from the other fields are not new
5.
The author would most likely agree with which of the following statements?
A. Other sciences outside of economics have developed decision making models which incorporate altruism, kindness, and loss aversion that can accurately predict human behavior.
This goes too far by saying accurately predict human behavior. The models have certain characteristics that are better than the economic models but that's about as far as we can go.
B. Decision making models created by some biologists are superior to models created by economists who adhere to the standard economic models.
We know that the evidence from other fields can help economic models but we do not know if the models of biology are better than the models of economics.
C. Some of the principles that are being incorporated into modern economics contradict the beliefs of some famous classic economists.
We don't know about famous classic economists beliefs
D. Self-interest should not be considered as a major contributor to rational decision making.
Although self-interest is mentioned and the passage says it is overemphasized the passage does not say that it should not be considered a major contributor..
E. Traditional economics has not considered increased pleasure and reduced pain as two distinct sources of happiness.
The passage emphasizes that Economics generally frames people as pleasure seeking but forgets that they are loss averting. CORRECT
I hope you are well. Here are the explanations for the last three.
Happy Studies,
HG.
3.
The endowment effect makes you give more value to things that you own. So we are looking for an example of the something that is owned that is being given more value than it should have.
According the passage, which of following is an example of the endowment effect?
A. Buying a new car for more money than you had expected to spend because you felt emotionally attached to the brand name.
Nothing is owned
B. Cancelling a vacation which has been planned for six months so that you can avoid missing a potentially lucrative business deal.
Nothing is owned
C. Selling an old coffee mug that you no longer use for more than the market value only because you consider it yours.
You own the mug and you assign it more value because you own it. Correct
D. Putting a high value on your parents furniture because you associate it with childhood memories.
You don't own the furniture
E. Placing a lower value on a baseball card that you plan to buy because you already own a card of comparable value.
This is not endowment effect. This is saying that you have a certain priced card and because of that you don't necessarily need another in that category therefore you are not willing to pay a lot for this other card of comparable value.
4.
Which of the following best expresses the main idea of the passage?
A. To describe some flaws in traditional economic thinking and to recommend a course of action to improve economic models and the accuracy of their predictions.
This has the right content and tone. The passage does describe flaws and then suggests incorporating other fields of study to improve the models. Correct
B. To provide a history of a certain type of economics along with a prediction for its future.
Overall it is not history.
C. To describe a flaw in standard economic theory and provide several examples of how the flaw manifests itself in practical applications.
This is missing the recommendation part.
D. To describe several ways in which economists can benefit from the decision making theories of other fields and provide experimental evidence of these benefits.
There was no experimental evidence of the benefits
E. To propose an adjustment to standard economic theory incorporating new ideas from other scientific fields.
This is close but the ideas from the other fields are not new
5.
The author would most likely agree with which of the following statements?
A. Other sciences outside of economics have developed decision making models which incorporate altruism, kindness, and loss aversion that can accurately predict human behavior.
This goes too far by saying accurately predict human behavior. The models have certain characteristics that are better than the economic models but that's about as far as we can go.
B. Decision making models created by some biologists are superior to models created by economists who adhere to the standard economic models.
We know that the evidence from other fields can help economic models but we do not know if the models of biology are better than the models of economics.
C. Some of the principles that are being incorporated into modern economics contradict the beliefs of some famous classic economists.
We don't know about famous classic economists beliefs
D. Self-interest should not be considered as a major contributor to rational decision making.
Although self-interest is mentioned and the passage says it is overemphasized the passage does not say that it should not be considered a major contributor..
E. Traditional economics has not considered increased pleasure and reduced pain as two distinct sources of happiness.
The passage emphasizes that Economics generally frames people as pleasure seeking but forgets that they are loss averting. CORRECT
