Which of the following best illustrates the application of the model-building process to economics?
a.On a Sunday morning talk show, two economists with differing political agendas argue about the best way to solve the Social Security problem on a Sunday morning talk show.
b.A labor economist notices that unemployment tends to be higher among teenagers than more experienced workers, develops a model, and gathers data to test the hypotheses in the model.
c.A Ph.D. student in economics develops a plausible mathematical model of an industry for his dissertation, but there is no data to test the model.
d.Economists come to believe that some economic models are true simply because prominent leading economists say they are true.

The answer is: B) A labor economist notices that unemployment tends to be higher among teenagers than more experienced workers, develops a model, and gathers data to test the hypotheses in the model.

Explanation:

Economic model: simplified description of reality, where hypotheses about economic behavior are tested. Economic models are subjective (they are influenced by the scientist's personal judgement), since there are no objective measures (e.g. the combination of A + B will always be Z) in economic outcomes. Economic models are divided into two broad classifications: theoretical and empirical.