Comprehension: The passage below is accompanied by four questions. Based on the passage, choose the best answer for each question. Oftentimes, when economists cross borders, they are less interested in learning from others than in invading their garden plots. Gary Becker, for instance, pioneered the idea of human capital. To do so, he famously tackled topics like crime and domesticity, applying methods honed in the study of markets to domains of nonmarket life. He projected economics outward into new realms: for example, by revealing the extent to which humans calculate marginal utilities when choosing their spouses or stealing from neighbors. At the same time, he did not let other ways of thinking enter his own economic realm: for example, he did not borrow from anthropology or history or let observations of nonmarket economics inform his homo economicus. Becker was a picture of the imperial economist in the heyday of the discipline’s bravura. Times have changed for the once almighty discipline. Economics has been taken to task, within and beyond its ramparts. Some economists have reached out, imported, borrowed, and collaborated—been less imperial, more open. Consider Thomas Piketty and his outreach to historians. The booming field of behavioral economics—the fusion of economics and social psychology—is another case. Having spawned active subfields, like judgment, decision making and a turn to experimentation, the field aims to go beyond the caricature of Rational Man to explain how humans make decisions…. It is important to underscore how this flips the way we think about economics. For generations, economists have presumed that people have interests—“preferences,” in the neoclassical argot—that get revealed in the course of peoples’ choices. Interests come before actions and determine them. If you are hungry, you buy lunch; if you are cold, you get a sweater. If you only have so much money and can’t afford to deal with both your growling stomach and your shivering, which need you choose to meet using your scarce savings reveals your preference. Psychologists take one look at this simple formulation and shake their heads. Increasingly, even some mainstream economists have to admit that homo economicus doesn’t always behave like the textbook maximizer; irrational behavior can’t simply be waved away as extra economic expressions of passions over interests, and thus the domain of other disciplines…. This is one place where the humanist can help the economist. If narrative economics is going to help us understand how rivals duke it out, who wins and who loses, we are going to need much more than lessons from epidemiological studies of viruses or intracranial stimuli. Above all, we need politics and institutions. Shiller [the Nobel prize winning economist] connects perceptions of narratives to changes in behavior and thence to social outcomes. He completes a circle that was key to behavioral economics and brings in storytelling to make sense of how perceptions get framed. This cycle (perception to behavior to society) was once mediated or dominated by institutions: the political parties, lobby groups, and media organizations that played a vital role in legitimating, representing, and excluding interests. Yet institutions have been stripped from Shiller’s account, to reveal a bare dynamic of emotions and economics, without the intermediating place of politics.

Question

cdquestions Admin · Accepted Answer

""

\(\text{The Politics of Change}\)	\(\text{The Change in Politics}\)	\(\text{Politics and Change:}\) A Global Perspective}
In "The Politics of Change," political analyst Dr. Emily Harper examines the dynamics of social movements and their impact on policy reform. Through detailed case studies, she explores how grassroots organizations, protests, and advocacy campaigns shape public opinion and influence lawmakers. Dr. Harper provides insights into the strategies that successful movements employ and discusses the challenges they face in a complex political landscape. She discusses key strategies, such as coalition-building, media engagement, and the use of digital platforms to amplify voices.	This book by veteran journalist Mark Stevens investigates the shifting political landscape in the 21st century. Focusing on major elections, emerging political parties, and the role of social media, Stevens analyzes how technology and demographics are transforming political engagement and voter behaviour. Through interviews with political leaders, campaign strategists, and everyday voters, Stevens uncovers how demographic shifts and technological advancements are reshaping political discourse in urban areas. He analyzes the implications of these changes for traditional political institutions and explores how movements like #MeToo and Black Lives Matter have disrupted conventional narratives.	In this insightful work, international relations scholar Dr. Anika Patel presents a global analysis of political change across various regions. She explores the factors that drive political transitions, including economic shifts, cultural movements, and international influences. Dr. Patel emphasizes the interconnectedness of global politics and how local changes can have far-reaching implications. She analyzes various factors driving political transitions, including economic upheaval, cultural shifts, and the impact of globalization. She provides case studies from diverse regions, such as the Arab Spring, democratic movements in Latin America, and shifts in power in Asia. The book serves as a vital resource for understanding the complexities of political evolution in a rapidly changing world.

We can infer from the passage that the term '‘homo economicus” refers to someone who

The Correct Option is C

Solution and Explanation

“Times have changed for the once almighty discipline.” We can infer from this statement and the associated paragraph that the author is being

The Correct Option is A

Solution and Explanation

In the first paragraph the author is making the point that economists like Becker

The Correct Option is B

Solution and Explanation

The author critiques Schiller’s approach to behavioural economics for

The Correct Option is A

Solution and Explanation

Top Questions on Reading Comprehension

Questions Asked in CAT exam