--%>
Assignment Help - homework help

Good theory

It is frequently said that a good theory is one which can in principle be refuted by an empirical, data-oriented study. Describe why a theory which cannot be evaluated empirically is not a good theory.
In evaluating theory there are two steps: firstly, you have to examine the reasonability of the theory's assumptions; secondly, you have to test the theory's predictions by comparing them with facts. If a theory cannot be tested, it cannot be accepted or rejected. Hence, it contributes little to our understanding of reality.

   Related Questions in Microeconomics

  • Q : Constant price elasticities in

    Perfectly inelastic demand curves include constant price elasticities equivalent to zero as well as: (i) cannot exist within the real world across the full range of possible prices. (ii) happen more often than any other type. (iii) are horizontal line

    		•
  • Q : Perpetuity bond in fixed cash flows A

    A perpetuity is a: (w) financial asset which provides its owner eternal life. (x) perpetual motion machine which lasts forever. (y) bond which pays its owner an annual income forever. (z) profitable share in an established corporation. 

    Q : Caveat emptor-Laws and Regulations The

    The Caveat emptor is a prehistoric legal doctrine mainly based on the idea that buyer: (1) Are the finest judges of the value that they will receive when they purchase. (2) Must receive money back guarantees when products are flawed. (3) Need governme

    		•
  • Q : Meaning of price taker To be a price

    To be a price taker implies: (w) the larger firm in the industry will set the price for all other firms. (x) the entire market (industry) sets the price for all firms to take. (y) each firm takes the price as specified by the government. (z) firms tak

    		•
  • Q : Short run operation and long run

    When Presidio, Hybrid Roses and Texas boomed learned which its rent and utilities had soared upward by $9 per hour hence a new five-year lease would now cost $60 per hour, therefore this monopolist will: (w) continue to realize positive economic profi

    		•
  • Q : Output at unitary price elasticity

    Babble-On maintains world-wide patents for software which translates any of 314 spoken languages into text, along with automatic audio and text translations into some of the other three-hundred-thirteen languages. Facing Babble-On the demand curve has unitary

    		•
  • Q : Conditions of producers equilibrium

    Conditions of producers equilibrium: The conditions of producers equilibrium through the marginal cost and marginal revenue approach are as follows. 1. Marginal cost should be equal to marginal revenue.

  • Q : Joint Profit Maximization Joint profit

    Joint profit maximization is least compatible along with the behavior of: (w) General Motors’ division in Chevrolet, Cadillac, Hummer, Delco Remy and Frigidaire, etc. (x) a successful cartel as like OPEC. (y) a collusive agreement leading to sha

    		•
  • Q : Freedom of entry in monopolistically

    Along with freedom of entry in a monopolistically competitive market, in long run equilibrium is reached along with firms: (w) earning zero economic profit. (x) producing where price equals marginal cost. (y) producing their most efficient output. (z)

    		•
  • Q : Net income under the negative income tax

    Under the negative income tax system demonstrated in this given figure, a family of four along with earned income of $75,000 per year would have a net as [after-tax] income of: (i) $15,000 per year. (ii) $30,000 per y

    		•