An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to develop a model, the professor should take which steps? a. Identify the problem, develop a model based on simplifying assumptions and test the model to formulate a conclusion.

b. Gather data on crude oil prices and seemingly unrelated variables to look for associations, then formulate a hypothesis based on those unexpected associations.

c. Ask people in Alaska why they are not purchasing oil.

d. None of these. The oil industry is controlled by a cartel; therefore price changes in the industry cannot be explained using economic theories.

Question

Anastasia Ramos

Business

3 May, 09:25

An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to develop a model, the professor should take which steps? a. Identify the problem, develop a model based on simplifying assumptions and test the model to formulate a conclusion.

b. Gather data on crude oil prices and seemingly unrelated variables to look for associations, then formulate a hypothesis based on those unexpected associations.

c. Ask people in Alaska why they are not purchasing oil.

d. None of these. The oil industry is controlled by a cartel; therefore price changes in the industry cannot be explained using economic theories.

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Answers (1)

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Mario Allison · Answer 1

The answer is: A. Identify the problem, develop a model based on simplifying assumptions and test the model to formulate a conclusion

Explanation:

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